SoftBank, Naspers eye Dream11 stake


BENGALURU: Top technology investors, including Soft-Bank Vision Fund, Naspers Ventures and Tiger Global Management, have held discussions with sports fantasy company Dream11 to pick up a stake in the company. The deal size may go up to $500 million, according to two sources briefed on the matter. They added the transaction is expected to value the company at $2-2.5 billion — more than doubling in a few months from $1.1 billion in April this year.

The contours of the deal being discussed right now include a $300-million primary infusion and a $200-million secondary sale by existing investors in the company, said the sources. But things can change if the company doesn’t get the valuation it wants. “Dream11 doesn’t need money right now and was planning to raise capital only by early next year before the next Indian Premier League (IPL),” said one of the sources mentioned earlier.

The deal could see the participation of more than one new investor. Additionally, Dream11’s existing backer Tencent is also keen to increase its stake in the company.

Emailed queries to Dream11 and Naspers did not elicit a response till the time of going to press. Tiger Global and SoftBank declined to comment. Mint had reported earlier this month about Naspers looking to pick up a stake in Dream11 for $100 million at a $2.5-billion valuation.

The interest in Dream11 comes at a time when it has seen rapid increase in its user base and investors feel the model can be profitable, given that a high number of users transact on the platform. The company had reached 50 million users in February, which it planned to increase to 100 million by end of the year, and was adding half a million users daily earlier this year.

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Dream11 had projected total transactions on the platform of about $650 million for the year ending in March 2019, but crossed the $1 billion mark. After the recent season of IPL and cricket world cup, its run rate has crossed $2 billion, according to one of the sources mentioned earlier.

Its CEO Harsh Jain co-founded the company with Bhavit Sheth in 2008. Both together hold over a third of the company. Investors include Kalaari Capital, Multiples PE, Think Investments and Steadview Capital, besides Tencent.

While the company was in a legal grey area when it initially started, over the last two years, the Punjab, Mumbai and Haryana high courts, besides the Supreme Court, have ruled that Dream11 is a game of skill and not chance.





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