Dream Sports have implemented a hefty $250 million corporate venture fund and are in the process of becoming a sports technology conglomerate.
A recent announcement from Dream Sports states that they are willing to invest $1 million to $100 million in startups involved in sports, gaming, and fitness technology, especially those that have the potential to achieve at least $100 million in revenue.
This strategic move comes as the Mumbai-based company expands its portfolio beyond online fantasy gaming.
In a recent interview, the co-founder and CEO of Dream Sports, Harsh Jain said, “We want to redeploy our Ebitda and re-invest further in inorganic growth because, while organic growth continues, we don’t want to fall into the age-old trap of trying to do everything ourselves.” Through this initiative, the goal is to create a broader sports technology ecosystem and support a wide range of startups, he explained.
“We are good at something, and we’ll continue to grow that. What we do want is to back entrepreneurs, and to invest in other founders…,” Jain added.
“The company is open to making minority investments as well as acquisitions”, he continued.
“Dream Capital will cut cheques of $1 million or more and will have the ability to plow as much as $100 million”, Jain said.
It will initially invest in 20 startups that have the potential to generate at least $100 million in annual revenue within the next five years, over a period of 12 to 24 months.
“We started this as an experiment with Dream Sports Investments — like the ones in FanCode, Dream Pay. We learned that we didn’t want to go after incubating too much and wanted to back entrepreneurs who already dedicated a few years of their lives to solving a problem…,” Jain said.
A total of eight investments have already been made by Dream Sports. A $50 million investment in FanCode, the content, and commerce platform that it had developed was recently announced by the group.
In the previous month, the Supreme Court declared that Dream11s fantasy sports format was a ‘game of skill’ in response to a special leave petition that said it was gambling.
“While it’s a huge judgment it doesn’t change life for us because the earlier two Supreme Court judgments said the same thing. It’s just that this one has finality. The earlier two judgments also dismissed any claims of Dream11 being gambling, betting, or wagering, and it’s more of the same,” Jain said.
A $400 million secondary funding round earlier this year valued Dream Sports at around $5 billion. In an earlier interview, Jain had said, “Our focus now is on diversification. We have one good core business which has market leadership in its area. Now, we want to go and build the YouTube, Gmail, and Google Maps of sports. We want to build an Alphabet-like entity, not just Google Search.” Alphabet Inc is Google’s parent company.
In the past few years, the 13-year-old company has expanded its product and service offerings to include sports technology products and services in India. With DreamPay, the company offers payment solutions and has launched an accelerator, DreamX. DreamSetGo, a sports experiential company, is another subsidiary of Dream Sports.
“We’re not a VC fund and don’t have a fund cycle. A million-dollar acquisition is possible, and a $100 million minority investment is possible. We’re happy to just invest and help you build,” Jain said when asked how the corporate VC would differentiate itself from risk investors.
Unlike a typical VC, Dream Capital will offer entrepreneurs access to Dream Sports’ user base of 125 million, branding, and go-to-market strategy, said Dev Bajaj, managing director of Dream Capital.