Dream11 Set for Valuation of US$2.5 Billion After Next Funding Round

Reports in business media say that Dream11 is in advanced talks with at least four private equity firms and are closing in on a new US$235 million funding deal.

The deal includes a US$35 million primary fund raising and a US$200 million secondary sale of shares. This could see Chinese giant Tencent shareholdings come down to single digits. Tencent owns around 10.9% of Dream11's holding company, Sport Technologies Pvt Ltd.

Amid simmering tensions between China and India - which has included a ban on some Chinese apps in India - Chinese firms are backing out of the market. The early exit of smartphone maker Vivo from sponsorship of the Indian Premier League (IPL) amid an anti-Chinese backlash at the death of soldiers on the Himalayan border allowed Dream11 to become the new title sponsor of the IPL this week.

The private equity firms believed to be interested in buying a stake in Dream11 include TPG Capital, Tiger Global Management and Footpath Ventures among others, according to sources quoted in The Indian Express.

The deal would see Dream11's valuation more than double to US$2.5 billion from the $US1.1 billion in April 2019. Back then it was the US hedge fund Steadview that brought stakes from early Dream11 investors.

Despite the hefty valuation, Dream11's last financial results from 2019 saw the company's losses widen to RS. 131 Crores from Rs. 65 Crores in 2018. Revenue was strong, though, up to Rs. 775 Crores from Rs. 224 Crores.