Dream Sports, the parent company of the online fantasy gaming startup Dream11, has set up a corporate venture arm with a corpus of $250 million, in a bid to become a sports technology conglomerate.
The parent company of the online fantasy gaming startup Dream 11, Dream Sports, has setup corporate venture with a corpus of $250 million in a bid to become a sports technology conglomerate.
Dream Capital will be on startups in sports, fitness technology, and gaming in the early stages.
The development comes on the back of the Mumbai-based firm adding new avenues to its existing portfolio as it diversifies beyond an online fantasy gaming platform.
The Cofounder and CEO of Dream Sports informed the Economic Times that they are focusing on to redeploy their Ebitda and re-invest into inorganic growth because, while the organic growth of the the company continues, they are very much against the idea of trying to do everything themselves, which is an age-old trap.
Their vision is to build an overall technology-based sports ecosystem and back a startup hosts through their initiative.
Ebitda stands for earnings before interest, tax, depreciation and amortization.
Jain said that they are good at something, and they would continue to do that. Their main motive is to back entrepreneurs and then to invest in other founders. Jain said that their company is open to making acquisitions and minority investments.
Jain said their Dream Capital would cut cheques of at a minimum of $1 million and will have the ability to have as much as $100 million.
He added that the corporate venture capital fund would invest in near about 20 startups over a period of 1-2 years timeframe, they have the potential and inner belief that they can achieve at least $100 millionnin annual revenue within five years.
FAN CODE AND DREAM PAY STORY
Jain said that they started this as an experiment with Dream Sports Investments — like the ones in Fa nCode and Dream Pay.
They learned that they didn’t want to go after incubating too much and wanted to back entrepreneurs who already dedicated a few years of their lives solving a problem.
He said that the learnings from previous investments had helped him to build Dream Capital
Dream Sports will be financing the entire fund from the balance sheet and have already made around eight investments.
The Organization has also recently declared a $50 million investment in the commerce and content platform FanCode, which the Organization incubated.
JUDGEMENT IN FAVOUR OF DREAM 11
Last month, the Supreme Court said that Dreams fantasy sports format was a ‘game of skill’ in response to a special leave petition that alleged it amounted to gambling.
While it’s a vast judgment, it doesn’t change life for us because the earlier two Supreme Court judgments said the same thing. It’s just that this one has finality.
The earlier two judgments also dismissed any claims of Dream11 gambling, betting or wagering, and it’s more of the same, Jain said.
THE INTERVIEW OF THE CEO WITH ECONOMIC TIMES
Jain also spoke out to the ET that while the judgement is huge, it doesn’t change life for them because the previous judgements also said the same thing; it’s just that this one provides finality, the earlier two decisions were also similar to the claims of Dream 11 being gambling, wagering, or betting said it to be a ‘game of skill.’
Jain said that the two waves of the Covid-19 pandemic had been a rollercoaster for the sports industry and also for them.
The series of suspensions and cancellations of sporting events have impacted the fantasy sports industry indirectly as it relies on live games such as football, Cricket and what not.
They are 70%-80% in terms of where their projections were for their business.
Relative to the whole ecosystem, they’ve been able to run a business relatively unscathed. They are profitable, but they prefer not to announce their numbers.
THE COMPANY IS “NOT AVERSE TO GOING PUBLIC”
On the flurry of tech startup IPOs, Jain said the company is “not averse to going public”, but there were no definite timelines.
“We have never once entertained any notion of going public via a SPAC (particular purpose acquisition company) …We don’t have any near timeline…