According to AC Nielsen and the Indian Federation of Sports Gaming, the number of online fantasy gaming operators doubled to 60 from 30 in 2017 and about 100 million Indians are estimated to play fantasy sports by 2019. The leader in the space Dream11 with 90% of the market recently raised $100 million in venture funding.

Dream11’s Journey

Mumbai-based Dream11 was founded by Harsh Jain and Bhavit Sheth in 2012.  It was one of the first fantasy gaming platforms in India. It offers Indian sports fans a platform to showcase their sports knowledge. Fans can create their own team made up of real-life players from upcoming matches, score points based on their on-field performance and compete with other fans.

Dream11 is hosted on AWS. It has built a state-of-the-art Progressive Web App to provide a near-native experience to its users on its mobile web channel. Its backend is being built as a microservices architecture using highly scalable systems such as Cassandra, Kafka, MongoDB, and Spark. Its Android app boasts of 5 million daily active users. During the IPL games in 2018, it hosted 1 million concurrent users.

From 1 million users in 2014, Dream11 currently has over 40 million users playing Fantasy Cricket, Football, Kabaddi, and NBA on its platform. Its growth has been fueled by endorsements from former Indian cricket captain Mahendra Singh Dhoni and cricket commentator Harsha Bhogle. It is also the official fantasy sports partner of National Basketball Association, Hero Indian Super League, Hero Caribbean Premier League, and VIVO Pro Kabaddi League.

Dream11 has had its share of legal woes. In 2017, Varun Gumber, a resident of Chandigarh complained to the Punjab and Haryana high court that he was a victim of illegal gambling and had lost INR 50,000 ($700) while playing some games.

However, the court this year has ruled in Dream11’s favor. It has observed that such games cannot be considered gambling and that playing these games involves substantial skill. Further, Dream11 is a company with due registration that pays service tax and income tax. Therefore, the company is granted protection under Article 19 (1)(g) of the Constitution.

Dream11’s Financials

Dream11 follows a freemium business model. Its users can play in free practice contests. They can also choose to participate in cash contests that require users to pay an entry or platform fee and where there are cash prizes. About 90% of its users play in free contests. The company earns revenue by charging a small percentage of the bets.

Dream11’s revenue was INR 62 crore ($8.6 million) in 2017 while losses were INR 15 crore ($2.1 million).

Dream11 is venture funded and has raised over $100 million from investors including Kalaari Capital, Multiples Alternate Asset Management, Think Investments, and Tencent Holdings. It recently raised $100 million in a Series D round led by Tencent Holdings that valued it at over $500 million, a ridiculously high valuation for a revenue of $8.6 million.

Dream11 competes with fantasy sports platforms like MyTeam11 and HalaPlay as well as mobile game developer Nazara Technologies that is set to go public soon.