Renuka Ramnath-led private equity firm Multiples Alternate Asset Management and venture capital firm Kalaari Capital are likely to have earned robust returns through a partial exit in Mumbai-based gaming firm Dream11 Fantasy Pvt. Ltd.
Multiples PE and Vani Kola-led Kalaari sold part of their stake in Dream11 to Hong Kong-based hedge fund Steadview Capital in a transaction that valued the gaming company at more than $1 billion.
The deal also involved US-based hedge fund Think Investments selling a portion of its stake to Steadview, Dream11 said in a statement. The transaction propelled Dream11 into the unicorn club, making it the first Indian gaming company to cross $1 billion in valuation.
Dream11 didn’t disclose the amount Steadview invested or the money the selling shareholders made. It also didn’t disclose its exact valuation. However, TechCircle had reported last month that Steadview was looking to invest more than $100 million (Rs 710 crore then) in Dream11.
Dream11 also counts Chinese gaming and social media company Tencent as an investor. Tencent had led a $100-million Series D round in Dream11 in September 2018. Multiples PE and Kalaari had also invested in that round. Media reports last year had pegged the company’s valuation anywhere between $450 million and $750 million.
Multiples and Kalaari had both previously invested in Dream11 in 2015 and 2016, according to VCCEdge, the data research platform of VCCircle. The investments were made at a much lower valuation, estimated to be less than $100 million.
Dream11 was incorporated in 2007 by Harsh Jain (chief executive officer) and Bhavit Sheth (chief operating officer). The fantasy sport platform allows users to create virtual teams comprising real-life players and lets them organise a match based on statistical performances of those players in actual games. The platform offers fantasy cricket, football, kabaddi and basketball.
Ravi Mehta, managing director at Steadview, said Dream11 has shown strong growth, dominant leadership in fantasy gaming and strong engagement metrics.
A report by the Indian Federation of Sports Gaming (IFSG) and consultancy firm KPMG shows that Dream11 leads the fantasy sports market in total users, with over 50 million users. Its user base has grown at a compound annual growth rate of 230% over a period of three years. Dream11’s Jain is the chairman of IFSG.
The business of gaming has grown substantially in India over the past few years. Digital gaming’s popularity has risen largely on the back of the widespread use of smartphones and cheaper data.