Dream11 breaks even at operating level, turns in first profit despite costs doubling

By Joseph Rai

  • 21 Sep 2021

Sporta Technologies Pvt Ltd, which operate fantasy sports platform Dream11, has not only achieved breakeven at the operating level but has also recorded its first net profit ever even as expenditure nearly doubled for fiscal 2019-2020.

Dream11 joins that rare breed of tech unicorns (startups with at least $1 billion in valuation) that can boast of profitability at both the earnings before interest, taxes, depreciation, and amortisation (EBITDA) and bottom-line levels. 

Other tech unicorns such as Byju's, Paytm, Oyo and Ola are still wallowing in losses despite their valuations being higher than Dream11's. 

Among new-age companies that did their initial public offerings (IPOs) or filed for a public float this year, only beauty e-tailer Nykaa and online used car marketplace CarTrade said they are profitable.

Dream11 posted a net profit of Rs 180.76 crore for FY20 as compared to a net loss of Rs 127 crore the previous financial year, according to data intelligence platform VCCEdge. The startup registered losses of Rs 65.5 crore in FY18, Rs 15.68 crore in FY17 and Rs 5 crore in FY16.

Its EBITDA losses had seen a sharp jump from Rs 4.75 crore in FY16 to Rs 123.5 crore in FY19 before turning the corner this year.

The profits came on the back of more than two and half fold jump in net sales at Rs 2,070.37 crore during the period under review. In FY16, the company had net sales of Rs 13.71 crore.

Meanwhile, Dream11's total expenditure continued to rise on higher advertising and promotional expenses. Total costs nearly doubled to Rs 1,844 crore.

Dream11, which was the title sponsor for the Indian Premier League (IPL) in 2020, spent Rs 1,328 crore in advertising and promotions in FY20 as compared with Rs 785 crore the previous financial year.
Founded in 2008 by Harsh Jain and Bhavit Sheth, it runs fantasy leagues for cricket, football, kabaddi, basketball and other sports. The platform offers content in vernacular languages. 

It allows users to create virtual teams comprising real-life players and lets them organise matches based on statistical performances of those players in actual games.

The startup became the first homegrown gaming company to break into the unicorn club when Hong Kong-headquartered hedge fund Steadview Capital picked up a stake in April 2019.

Earlier in March 2021, Dream11 raised a $400 million secondary investment from a slew of investors. The deal marked the first-ever India investment for Silicon Valley-based venture capital firm TCV.

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