Fantasy sports unicorn Dream11, which has bagged the title sponsorship rights for the 2020 edition of Indian Premier League (IPL), is reportedly in talks with various private equity (PE) and venture capital (VC) firms to raise $50 million (Rs 375 crore), as per its communication to its investors. The move is being seen as part of the online gaming company's strategy to bring down the stake of its existing investor Tencent, a leading technology major from China.
Dream 11, the newly selected title sponsor for the IPL 2020, has substantial investment from Chinese conglomerate Tencent which reportedly owns 10-13 per cent stake in the fantasy sports platform. The Chinese firm had invested $100 million in Dream11 for a majority stake in the fantasy cricket league platform as part of the latter's Series D funding in September 2018.
Founded by Harsh Jain and Bhavit Jain in 2012, Dream11 has become the first Indian gaming company to achieve the unicorn status in April 2019 after a secondary investment from Steadview Capital Management.
Apart from Tencent, Dream11 counts Multiples, Think Investments, Steadview and Kalaari Capital among its investors. According to its website, the fantasy sport platform has partnered with IPL, BCCI, International Cricket Council (ICC), National Basketball Association (NBA), Caribbean Premier League and Australia's Big Bash League, among other sports associations and organisers.
On August 18, Dream11 emerged as the highest bidder for IPL 2020 title sponsorship with a bid of Rs 222 crore. The company outbid online education platforms Byju's and Unacademy to emerge on top, which submitted a bid of Rs 201 crore and Rs 170 crore, respectively. The Board of Control for Cricket in India (BCCI) has awarded the rights to Dream11 for this year's edition of IPL.
Dream11 will pay BCCI Rs 222 crore for the rights, which is nearly half the amount (440 crore) that Chinese smartphone maker Vivo was paying. Vivo India's sponsorship has been suspended for this edition of IPL over raising border tensions between India and China. Vivo had walked away from the T-20 tournament this year citing rampant negative sentiments against Chinese companies in the wake of deadly clashes between Indian and Chinese forces in Galwan valley back in May.