Mumbai: Kedaara Capital, the homegrown private equity investor, has entered the fray to invest in Dream 11, a fantasy sports platform that has revived its plans after a brief lull to raise $ 200 million (about Rs 1,500 crore) from a new set of investors through secondary and primary sale of shares.
Kedaara is competing with global and domestic funds such as TPG, Advent International, James Murdoch’s Lupa Systems and Chrys Capital that have already evaluated the investment opportunity until lockdown temporarily halted the fundraising exercise at a $ 2-2.2 billion valuation, said four people with knowledge of the development.
The company plans to accommodate 3-4 investors in this round. If successful, it would effectively double the 11-year-old company’s valuation in just over a year.
“All the earlier suitors are back in the reckoning along with some new names who are also keen to join the cap table as the talks have resumed in recent weeks. Even without the IPL, the company has been growing at a fast clip in sports like baseball,” said one of the four people, who didn’t want to be named.
This is also the largest capital raise till date for the company and will predominantly be a secondary sale of shares, providing a partial exit to Vani Kola-led Kalaari Capital, Renuka Ramnath-founded Multiples Alternate Asset Management and San Francisco-based Think Investments. There will also be a small fund infusion into the company through a primary sale, officials said.
The aim is to finalise the new investors by this month end, after the confirmatory diligence.
ET had reported on March 9 about the four investors that had planned to start a new innings with the company. While TPG is looking to invest through its Tech Adjacencies Fund, Advent International’s arm Sunley House Capital Management is involved in the deal.
Kalaari Capital, Multiples PE, Kedaara and ChrysCap did not respond to emails seeking comment till press time Sunday. Spokespeople for Dream11, Lupa, TPG and Advent International declined to comment.
In April last year, Hong Kong- and London-based investment firm Steadview Capital had picked up a stake in Dream11 for an estimated $ 60 million, catapulting the 11-year-old company into the unicorn club – or companies with a valuation of more than $ 1billion.
Dream11, founded in 2008 by Harsh Jain, a University of Pennsylvania and Columbia University alumnus, and Bentley University alumnus Bhavit Sheth, has emerged as an investor favourite over the course of the last two years. The company counts Chinese Internet behemoth Tencent as a major investor, after the WeChat operator invested $ 100 million in 2018.
Avendus Capital is advising the company on this round of fund raise. In fiscal year 2019, Dream11, with more than 80 million users in India, reported revenue of Rs 800 crore, compared with Rs 230 crore the previous financial year.