After a nail-biting end to a cricket match, we often hear people say, “I knew Kohli was going to hit a hundred today” or “I knew Bhuvneshwar Kumar was going to take the most wickets today.” Harsh Jain likes to tell these sports fans, “Put your money where your mouth is… Show the world that you know what you are talking about and not just talking shop after a game has happened.”
An avid sports fan himself, Harsh has brought together his love for sports, gaming and technology, with Dream11. A fantasy sports platform, Dream11 lets users pick a virtual team within an allocated budget for a match that is happening in the real world. Based on the outcome of the game, users can win money if their strategy and predictions are right. Such a fantasy sports gaming platform is legally considered as ‘Game of Skill’.
Addressing the audience at Kalaari’s Annual Summit 2019, Harsh noted,
“50M users is just product-market fit.”
While many startups would consider 50 million users to be the upper echelon of their growth curve, Harsh believes that in the last few years, Dream11 has only scratched the surface by capturing ~14 percent of the online sports market in India.
There are approximately 850 million cricket viewers on TV, of which 400 million consume cricket online, demonstrating tech savviness of the user base. By 2020, it is estimated that there will be 500 million online users with 40 percent them playing fantasy sports.
The journey, however, began back in 2014. Harsh was an ardent fantasy soccer fan, so when IPL was gaining traction in India, he went looking for fantasy cricket platforms and found that there were no real platforms available. “I felt that is a big problem which needs to be solved personally and for a billion other people,” noted Harsh about the genesis of why he started Dream11.
Sports enthusiasts have always wanted a platform to display their superior knowledge of sports, gain bragging rights, and make some money in the process. Dream11 has managed to capitalise on this user behaviour, making sports more engaging for users with a fantasy sports platform.
The ‘Dream’ run, though it’s still day one
Convinced about Harsh’s vision and potential of creating a large sports-centric company in India, Kalaari decided to partner with Dream11 in Dec’14 by leading its Series A investment. Since then, the company has witnessed phenomenal growth with a 100x increase in user base from 0.3 million users to 50 million recently. During this journey, Kalaari has been a strong sounding board on matters related to strategy formulation, scalability and hiring.
The short-term target for Dream11 in 2019 is to reach 100 million users driven by two big cricketing events - the IPL and the World Cup. The company intends to add 1 million users a day during IPL season as against 400k user additions a day in IPL 2018. Revenue and entry fees have grown exponentially (300X since December 2014). Dream11 is a true product and tech company, and with a small team of 150 people, the company aims to achieve multi-billion dollars in entry fee over the next few years.
Competitive edge with a data-driven culture
The early-mover advantage provided Dream11 access to 10 years of data, which is a treasure-trove to predict user behaviour. This has allowed the company to model user cohorts very well while maintaining good unit economics.
Dream11 already owns the fantasy sports category. The number of searches on Google for Dream11 is about 30x the number of searches for the fantasy gaming industry. It is well and truly on its way to being synonymous with fantasy gaming and was also used as a verb by an Indian commentator on air during IPL 2018! This explains the virality the product has managed to garner in its category.
Culture is key to blitz-scaling
Harsh believes that the secret sauce to Dream11’s journey and its vision going forward is the deep emphasis on culture. The core tenets to the company’s culture comprise data, ownership, performance, users, and transparency.
The company operates in cross-functional pods and does not follow the traditional pillars of product, marketing, and tech. Teams are empowered to experiment and make data-driven decisions. Failing fast and moving on has been the core philosophy to drive results. The small workforce is paid top of the market compensation (Dream11 is known to be in the top one percentile category).
The data-driven culture and the insights gathered have helped the company create an extremely successful marketing strategy. With greater than 30 percent of its users coming in from organic channels, the company is able to maintain an extremely low CAC of ~$10. It is also able to predict the payback period with a strong level of accuracy.
“Khelo dimaag se” says the celebrated Indian cricketer MS Dhoni in a 2018 TV advertisement for the fantasy sports company. Such campaigns along with the company’s highly successful digital marketing and referral initiatives have gotten the Indian masses hooked onto the gaming platform and created virality around fantasy sports in India.
Fantasy sports on Dream11 is a pan-India phenomenon. With growing internet penetration and affordable smartphones, Tier II cities are contributing to two-third of the user base and are also expected to be the biggest growth drivers over the next few years.
The road ahead
“What’s a sports team without its fans?” asked Harsh. His long-term vision and intention with Dream11 is being a sports data company centred around its growing and loyal user base of sports fanatics. He said, “Dream11 is a sports data company and fantasy sports is just the beginning. In the years to come, it intends to span across multiple dimensions of sports content, merchandising, ticketing, memorabilia and fan engagement.”
Watch the entire video of the session here:
The Kalaari Annual Summit- Every year, Kalaari hosts a Summit that highlights the India opportunity and the impact that start-ups have on the ecosystem. Over the years, the Summit has become a seminal platform for industry thought leaders to engage in dialogue on growing India’s digital economy. This year our theme was #HindustanHamara, where we discussed how startups are embracing India’s diversity and building “Uniquely Indian” business models to enable inclusive digital growth. Read more about the summit here.
Disclaimer: Kalaari is an investor in Dream11. The article is the independent opinion of the author and does not represent those of Kstart or Kalaari.
Acknowledging Mandar Dandekar and Ashwin Toshniwal, as contributors to this article. Mandar is a Principal at Kalaari and Ashwin is a Kstart fellow.
The article was previously published here
Disclaimer: Kalaari Capital is an investor in YourStory. The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YourStory.