Mumbai: Dream11, an online fantasy gaming platform, posted a profit of Rs.180 billion in fiscal 2020, making it one of the few Indian consumer tech unicorns to become profitable. It had posted a loss of Rs 87 crore in FY19.
Dream11, which is operated by Sporta Technologies aka Dream Sports, also saw sales increase more than 2.5 times to Rs 2,070.4 billion in FY20 from 775.5, according to the latest regulatory documents from the Tofler business intelligence platform Rs billion in FY19. In the registration, the company attributed its sales growth to “innovative marketing strategies” and “exciting new products”.
Omni-channel beauty and personal care retailer Nykaa is the only other major consumer-centric startup to have made a profit – nearly Rs.62 billion in FY21.
Earlier this year, Dream Sports closed a $ 400 million round of secondary funding that was valued at approximately $ 5 billion. According to industry sources, another second round with a significant jump in valuation is underway. In a secondary transaction, existing investors sell their shares to new ones and the money does not flow into the company’s coffers.
Company spending increased to Rs 1,867 crore in FY20 compared to Rs 934 crore in the previous year. Dream11 spent 71% of its total spending – Rs 1,328.02 billion – on advertising and promotions, compared to Rs 785 billion in the previous fiscal year. Employee benefit spending increased 133.6% to Rs 153.21 billion in FY20.
In an interview with ET in March, co-founder and CEO Harsh Jain said the company was already profitable and wanted to diversify its offering. To expand its non-fantasy gaming offerings, it set up a corporate venture fund in August to support sports technology startups and become a large online sports technology company. The corporate venture arm is worth $ 250 million. It finances the entire fund from its balance sheet and has already made more than eight investments.
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“We want to redeploy our Ebitda and keep investing in inorganic growth because while organic growth continues, we don’t want to fall into the age-old trap of doing everything ourselves,” Jain told ET in August. Ebitda, which stands for earnings before interest, taxes, depreciation and amortization, is a measure of a company’s overall financial performance.
In an earlier interview with ET, Jain said, “Our focus is now on diversification. We have a good core business that is the market leader in its field. Now we want to build YouTube, Gmail and Google Maps of the sport. We want to build an alphabet-like entity, not just Google search. “Alphabet Inc. is the parent company of Google.
Co-founded by Jain and Bhavit Sheth in 2008, Dream11 had over 9 crore active users playing fantasy cricket, soccer, kabaddi, and hockey, according to the file. While the Supreme Court ruled in July that Dream11’s fantasy sports format was a “game of skill,” the Karnataka government proposed a bill last week that would ban such games as part of “online gambling.” However, the bill made exceptions for lotteries and betting on horse races.