Dream11 Becomes India’s 1st Gaming Unicorn: 3 Stages Of This Billion-Dollar Startup You Should Know

Fantasy gaming is a phenomenon which is slowly, but gradually coming up in India. Sports lovers are opening up to the idea of creating fantasy teams and then placing bets on their real-life performance to win or lose their fantasy games.

Dream11, one of the pioneers in this niche, has just become a Unicorn, that is a billion-dollar startup. This also makes Dream11, India’s first gaming unicorn. 

How did Dream11 become so big in India, where 90% of the people are not even aware of fantasy games?

Dream11: India’s 1st Gaming Unicorn 

In the last 24 hours, few exciting developments have taken place at Dream11, which makes them India’s first gaming unicorn. 

London and Hong Kong-based Steadview Capital has invested $60 million in the company, against a valuation of $1-$1.5 billion. 

At the same time, three investors: Kalaari Capital, Multiples Alternate Asset Management and Think Investments (San Francisco-based hedge fund) have sold their existing equities in the company.

Dream11 Chief Executive Harsh Jain has confirmed the development, as he said, “We are excited to welcome Steadview Capital onboard.”

Just 8 months back, Tencent had invested $100 million into Dream11, which valued the company at $500 million. Tencent is the world’s 5th largest Internet company.

3 Stages Of Dream11 In Last 10 Years

Dream11 was founded 10 years ago, by Bhavit Sheth, who is a Bentley University alumnus and Harsh Jain, who is a University of Pennsylvania and Columbia University alumni.

Cricketer Mahendra Singh Dhoni is the brand ambassador of this company, and more than 5 crore users are playing fantasy games on this platform. The success hasn’t been so easy for them.

Stage 1: When Dream11 was launched in 2009, it was an ad-based, free for all sports app where users discussed sports via community platform, read blogs, and playing fantasy games, based on seasons.

But soon, the founders found that this model will not work, as it's not scalable. 

Stage 2: Between 2009 and 2012, the company ran out of funds. The founders didn’t want to want to go back to their parents for money, and this was a crucial stage because they needed to survive.

In 2010, they launched a digital marketing agency and decided to make some money. Out of 50 employees, 40 employees were asked to work for clients, and the core team for Dream11 was reduced to 10 employees. 

This worked, and they saved money to resume their passion. The Digital agency they started: Red Digital, was acquired by GoZoop in 2013.

Stage 3: Within 3 years, the business model was changed, and transformed into a freemium model, where users accessed free features up to a point, after which, they were asked to pay. The company described their company as ‘freemium fantasy sports for single matches’.

The company is still following the same business model, as 85% of the players are free users, and rest 15% are paid users, with Rs 25 as the average investment into the games. It can go as low as Rs 11, and often it can cross thousands as well. The combined winning pot of all winnings is often more than Rs 1 crore, depending on the game, and trends.

15% of 50 crore users is 7.5 crore users, who are paying on an average Rs 25 per month, which becomes revenues of more than Rs 187 crore. 

Dream11 becoming a Unicorn opens up doors for other sports startups and especially fantasy game platforms in India.