This fantasy sports firm is turning a venture capital investor

Dev Bajaj, managing director, Dream Capital.
Dev Bajaj, managing director, Dream Capital.


Dream Capital’s corpus is higher than the $150 mn second fund of Wipro Ventures, the software services firm’s funding arm

DELHI/BENGALURU : Dream Sports, the owner of fantasy sports platform Dream11, has set up a $250 million venture capital (VC) fund to invest in sports, gaming and fitness-tech startups.

Dream Capital, the venture capital arm, will be funded from the balance sheet of Dream Sports, Dev Bajaj, managing director, Dream Capital, said in an interview.

Bajaj said that the company will back both early- and late-stage startups.

Dream Sports operates sports streaming platform FanCode, sports experiences platform DreamSetGo, and payment platform DreamPay.

While Dream Capital will look to increase the fund’s corpus later, its initial size shows that Indian unicorn startups are now ready to operate their corporate venture arms and manage a portfolio of companies.

Gross revenues of online fantasy sports operators nearly tripled to  <span class='webrupee'>₹</span>2,400 cr in the year  to  March 2020 from   <span class='webrupee'>₹</span>920 cr  the  previous  year. 
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Gross revenues of online fantasy sports operators nearly tripled to 2,400 cr in the year  to  March 2020 from   920 cr  the  previous  year.  (Photo: Getty)

Dream Capital’s corpus compares well with those of Indian venture capital firms such as Stellaris Venture Partners and Chiratae Ventures, which recently closed $225 million and $337 million funds, respectively.

Dream Capital’s corpus is also higher than the $150 million second fund of Wipro Ventures, the investment arm of the software services company.

Dream Sports is not the first startup unicorn to set up an investment arm. Recently, eyewear retailer Lenskart floated its $20 million vision fund to invest in ancillary businesses.

The venture arm of Dream Sports aims to make at least 15 early-stage bets and deploy a significant part of the corpus over the next 12-24 months. It will take a ‘board observer’ seat in some of its portfolio investments.

Dream Capital has already started deploying its corpus, investing across eight companies, including e-sports platform SoStronk and sports footwear and equipment brand Elevar.

Dream Capital has also acquired video game developer Rolocule, which has been rebranded as DreamGameStudios.

The fund is also looking to do follow-on rounds in Dream Sports incubated companies, including FanCode and DreamSetGo.

“We are flexible in our investment stage focus. We did not want to limit our cheque sizes because we do not want to miss out on great opportunities. But we will make an investment of at least $1 million (in companies), and our goal is to scale our portfolio companies to $100 million of annual revenues individually," said Bajaj, who was previously a venture partner with Kalaari Capital, an early investor in Dream Sports.

“Dream Capital is also open to co-investing with other VC firms, particularly at an early stage. We do not have a preference if we want to lead a round," Bajaj said, adding that the fund’s focus will remain on ancillary opportunities to DreamSports.

Dream Capital will also make follow-on investments in companies incubated under its sports accelerator programme, DreamX.

With a team size of roughly seven members, Dream Capital has also made fund-of-funds investments in global sports-tech venture capital firms, which will help its investee companies to tap international opportunities.

“As a part of our global strategy, we have made investments in global sports and gaming funds. It is not a significant part of the present corpus, though. The fund of funds strategy is primarily there because sometimes we don’t have coverage in certain areas. However, our strategy is largely focused on Indian investments," Bajaj said.

He did not share specific details on the fund of funds but said that Dream Capital could also invest directly in startups outside India.

Earlier this year, Dream Sports raised $400 million in new funding, led by global investors TCV, D1 Capital Partners and Falcon Edge, more than doubling its valuation to $5.5 billion in six months.

The gross revenue of online fantasy sports operators nearly tripled to 2,400 crore in the year ended 31 March 2020 from 920 crore in the previous year, according to a FIFS-KPMG 2020 report.

Several unicorn founders, including OYO Hotels and Homes’ Ritesh Agarwal and Paytm’s Vijay Shekhar Sharma, also run their personal investment funds

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