The Business Model of Dream11

"The company which made betting legal."

Betting (Satta) on sports was a regulated speculative activity. It is the activity of predicting sports results and placing a wager on the outcome.

India has a love affair with cricket that is unrivalled by any other country. Wagering on the Indian Premier League dominates all different bettings on major sportsbooks serving India. After cricket, football is the second most mainstream sport with a huge load of activity on worldwide games, including the English Premier League. 

Other well-known games to wager on in India, incorporates badminton, tennis, ball, and worldwide game associations, for example, Aussie Rules football, the NBA, NFL, and the sky's the limit from there. 

Bettors can put down wagers on anything from individual games and competitions to individual bets, for example, bets can be put on the number of goals the Indian national team will score during the 2023 AFC Asian Cup.

Sports betting in India is essentially unlawful aside from wagering on horse races. India's Supreme Court has governed horse racing, a game of expertise, and thus is lawful. Nonetheless, all different game wagering depends on the laws of the individual states or the overall laws of India. 

A large portion of India is dependent upon the Public Gambling Act of 1867 and the Technology Act of 2000. Under those laws, sports wagering isn't allowed. Notwithstanding, individual states reserve the privilege to make their own gambling laws. 

It is broadly realised that India's administration isn't effectively hoping to arrange internet betting locales or any residents who decide to play on the destinations.

If people want to place a bet, there are various apps and websites that allow you to do the same. One of those platforms is Dream11. 

Dream 11 has made betting on sports legal in the international market. People might think betting is illegal, and this company is doing it online, its brand ambassador is M.S. Dhoni, there is funding, betting on IPL, etc. Maybe this is all a fraud, and maybe it is a fraud company, which is involved in illegal betting.

However, in reality, Dream 11 is not a fraud company. Rather, they have a simple and legal business model. 

About Dream11

Dream11 is a fantasy sports platform. It was founded in 2008 by Harsh Jain, who did engineering at the University of Pennsylvania, and Bhavit Sheth, who was a graduate of Mumbai's DJ Sanghvi. They were both around 22. Jain was working as a marketing manager at an infrastructure and real estate firm, Jai Corp, promoted by his father, Anand Jain.

Dream11 started as a personal project, as both Jain and Sheth, were huge fans of English football fantasy leagues. They wanted to do something similar for Indian Premier League (IPL), which had just started. At the same time, the duo dabbled in other ventures, including a digital and social media agency called Red Digital in 2010 which they sold to Gozoop for about Rs 7 crore in 2013. They both also pursued MBA from the U.S.

Initially, Dream11 ran as an ad-based model with a season-long format, which didn't find many takers. In 2012, the company decided to stop this model and instead, focused on daily matches and allowed users to put money on the teams.

In 2012, it launched a freemium Fantasy Cricket. Things started to take off in 2014 when it reached 1 lakh users, and the company raised its first round of funding from Kalaari Capital. Jain was introduced to the V.C. firm by Snapdeal co-founder Kunal Bahl, who was his batchmate at UPenn.

Business Model of Dream11

Dream11 thrives on a freemium business model, attracting a large user base and generating revenue through paid features. For FY23, Dream11 reported a net profit of ₹187.8 crore, a 32% increase from previous year. For the same fiscal year, ₹6,384 crore revenue was seen as compared to ₹3,840 crore in FY22.

Here's a breakdown of their key strategies:

a. Free-to-play contests: Dream11 offers free leagues where users can create fantasy teams and compete for smaller prizes. This allows them to try out the platform and understand the gameplay before committing money.

b. Paid contests: To get a chance at bigger payouts, users can enter paid contests with an entry fee. Dream11 takes a cut of this entry fee, typically ranging from 15% to 20% of the total prize pool.

c. Increased User Engagement: The combination of free and paid options keeps users engaged. Free players can upgrade to paid contests for a shot at bigger wins, while paid players might also participate in free leagues for practice or fun.

Dream11 also earns capital by these two methods:

1. Transaction Fees: In some cases, Dream11 might also charge a processing fee for depositing or withdrawing funds.

2. Advertising: While not their primary revenue source, Dream11 might explore advertising opportunities within the app to generate additional income.

Journey of Dream11

Dream11 has a venture capital investment. In 2015, it raised a series of funding. In 2016, its users hiked to 13 lakh. In 2017, they had series C funding, and Harsha Bhogle was hired as a brand ambassador. 

It reached 1.7 crore users in 2018 and entered a partnership with ICC, PKL, FIH, and BBL. M.S. Dhoni was also hired as the new brand ambassador. In the same year, the first-ever fantasy Hockey was launched.

In 2019, Dream11 reached 7 crores+ users, and the first-ever fantasy volleyball was also launched. In 2020, it has crossed 9 crores + users and is the title sponsor of the Indian Premier League 2020. In 2024, Dream11 has more than 20 crore users making it India's largest fantasy platform.

Dream11 Funding

Dream Sports, the parent organisation of India's driving on the web fantasy sports organisation Dream11, has ensured its crisp financing of $225 million (₹1,868 crore) from Tiger Global Management, TPG Tech Adjacencies (TTAD), ChrysCapital, and Footpath Ventures.

The funding, which is to a great extent secondary in nature, with a more moderate primary part, is additionally expected to bring about an additional decrease of Chinese gaming and social media giant Tencent Holdings' stake in the organisation to a singular digit. Tencent had driven Dream11's Series D financing round with $100 million in September 2018, alongside different investors, including Kalaari Capital and private value firm Multiples Alternate Asset Management.

As of Tracxn, Dream11 has raised around $725 million in funding, with the recent funding round done in 24 March 2021 for $400 million.

Dream11 also won the title sponsorship rights for the 2020 edition of the Indian Premier League (IPL) for ₹222 crore and was additionally marked as a co-presenting sponsor for the league on Star Sports with an expected outgo of ₹100 crore. As per a report, Dream11 was the most visible principal sponsor brand on social media for IPL 2024.

Legality

Only 15% of the players on Dream11 have till now paid for a game, while the remaining participants play for free. Just a few years ago, the number of users used to be 5%, but referrals and M.S. Dhoni built the needed credibility. 

The company has had its share of legal issues. In 2017, one of its users took Dream11 to Punjab and Haryana courts after losing battles, but courts ruled in favour of Dream11, stating it is not gambling but a simple game of skill as users build a team based on the current form and past performance of athletes.

This ruling does not make gaming legal in India. Every state has its own rule. Jain set up an industry body called the Indian Federation of Sports Gaming (IFSG) in 2017 to establish self-regulation standards for the industry.

Dream11 Competition 

The top 4 competitors of Dream11 Fantasy Private Limited are Galactus Funware Technology Private Limited, My11Circle, HalaPlay, and FanFight. Together, they have raised over 148.9M between their estimated 263 employees. 

Dream11 Fantasy Private Limited's revenue is ranked 1st among its top 10 competitors. The top 10 competitors average 65.5M. Dream11 Fantasy Private Limited has 362 employees and is ranked 1st among its top 10 competitors. The top 10 competitors average of 125.

Galactus Funware Technology Private Limited is one of Dream11 Fantasy Private Limited's top adversaries. Involved in the gaming business, Galactus Funware Technology Private Limited was established in Bengaluru, Karnataka in 2018. Contrasted with Dream11 Fantasy Private Limited, Galactus Funware Technology Private Limited produces $318.6M less income.

My11 Circle is Dream11 Fantasy Private Limited's #2 rival. My11Circle was established in 2019 and is settled in Mumbai, Maharashtra. My11Circle contends in the Application Software industry and creates $317.8M less income as compared to Dream11 Fantasy Private Limited.

HalaPlay is another top rival of Dream11 Fantasy Private Limited. HalaPlay's central command is in Bangalore, Maharashtra, and was established in 2017. It works in the Application Software industry and produces 0.13% of Dream11 Fantasy Private Limited's income.

The Bottom Line

The company is a for-profit organisation and is India's biggest sports and gaming platform, with 30 million+ clients playing Fantasy Cricket, Football, Kabaddi, and NBA.

A game of skill, Dream11 offers Indian sports supporters a stage to grandstand their game information. Fans can make their group of genuine players from up-and-coming matches, score points dependent on their on-field execution and compete with different fans.

This online platform helps enthusiastic supporters increase their involvement and connect further deeply with the game they love by being a team owner and not simply a speculator. Dream11 is likewise the official partner of the top games associations on the planet, for example, the Hero CPL, Hero ISL, and NBA. 

Dream11 is likewise the official partner of the top games associations on the planet, for example, the Hero CPL, Hero ISL, and NBA. Dream11 can be used through the web/versatile website or the Android and iOS applications.