Technology has enabled us to have stronger engagement with sports through various avenues. And tapping into this opportunity is Dream Capital, the venture capital and M&A arm of Dream Sports, which seeks to build an ecosystem around sporting activity.
Today, sports is not just a competition between individuals or teams, but has expanded much more into genres like fantasy games, esports, mobile games, etc. Dream Capital is looking to cash in on this opportunity by incubating new businesses or by partnering with startups in this space.
Dream Capital’s parent company, Dream Sports, is already a market leader in the fantasy sports segment in India, with a user base of 150 million. This has only driven the VC arm to be at the epicentre of this growing sporting ecosystem in the country.
Started in March 2020, Dream Capital has a corpus of $250 million, which is derived from the balance sheet capital of Dream Sports.
In an interaction with YourStory, Dev Bajaj, Chief Strategy Officer of Dream Sports, and Head Dream Capital, says, “The top-most priority is to understand where our users are going to spend their time and money, if not now, but in the next 3-5 years, and how we can help businesses accelerate them to a potential total addressable market.”
Dev was earlier a financial services professional, an agritech entrepreneur with a successful exit, and a venture capitalist.
Portfolio companies
Dream Capital has a portfolio of 10 companies, which gives an inkling of its thought process and how it is putting this into action.
For example, it has invested in Fancode, a Dream Sports-incubated business. Fancode is a fan engagement platform that provides live content, sports statistics, analysis, and commerce. It also creates a live experience for the fans watching different sports.
There is also Dreamsetgo which provides the right travel experience for fans to the venue of sporting events.
Other companies in its portfolio are focused on esports, mobile games, fitness, sports equipment, and even fintech. They include Dream Pay, Dream Game Studios, KheloMore, Elevar, Sostronk, Fittr, and Marketwolf.
In April this year, Dream Capital led a $120 million funding round in Rario, a non-fungible token (NFT) marketplace for cricket.
A strong backer of blockchain-related startups, Dev believes there are many use cases of this technology in sports. An example of this is using blockchain for something like selling tickets for sporting events. However, he notes the VC firm’s focus would be on those blockchain startups that do not have any crypto element to it.
Deeper engagement
Given the strides that Dream Capital has made over the past two-odd years, it is now eager to build stronger engagement with startups in this space and see how it can remain connected with sports fans.
The question Dream Capital is asking startups it is investing in is the value they are creating for users and how they are going about solving the problem. The VC arm believes it can provide the capital along with strategic guidance to build these businesses.
Commenting on the startups backed by Dream Capital, Dev says, “We look for immense passion in the founding team that goes out there to disrupt the space and combining with this is the clarity of thought on how they will build a responsible business with solid unit economics.”
Dream Capital is stage agnostic in terms of funding into startups and there is no cap on the funding amount. At an early stage, it would generally be the sole investor, and in the later stages it partners with other venture capital firms.
According to Dream Capital, besides the value of financial capital, it also provides other strategic inputs for startups like domain matter experts, tech, marketing, product development, networks, etc. Most importantly, it provides access to the larger user base of Dream Sports.
Wide canvas
Today, for Dream Capital, the scope of its investment activity is quite wide in the area of sports, which include segments such as fan engagement, esports, content, apparel, commerce, gaming, and Web3.
Dev says, “We would like all sports and gaming entrepreneurs in the country to come and talk to Dream Capital as we are very entrepreneur friendly.”
At the same time, there are certain investments which may not fall exactly into its playbook. This includes its investment in fitness apps like Fittr and pure play fintech startup Marketwolf. In some cases, it has partnered with other VC firms.
On its investments in the fintech startup, Dev says, “We believe that Dream Sports users will appreciate innovative and leading fintech products. Therefore, we want to back fintech startups and also give them access to our users.”
A report by FICCI-EY on the Media and Entertainment (M&E) sector in India noted that the online gaming segment grew 28 percent in 2021 to reach Rs 10,100 crore. Online gamers grew 8% from 360 million in 2020 to 390 million in 2022. Real money gaming comprised over 70 percent revenue of the segment.
The report further said that online gaming will continue to grow and reach 500 million gamers by 2025 to become the fourth largest segment of the Indian M&E sector. This will include verticals such as esports, fantasy sport, casual gaming, and other games of skill.
As part of its future plans, Dev says, the focus of Dream Capital will be to make sure that its portfolio companies come onto their own in the next few years. “We will not be successful unless we are entrepreneurial in nature,” he remarks.
“We want to make larger strategic investments in startups that are closely tied to our narrative of sports, gaming, fintech, and futuristic consumer tech,” says Dev.
