Business Model of Dream11

Dream 11

Fantasy games are a reality in India now with the incarnation of Dream11. This has been an excellent fairy dream and has a Unicorn in it. The company was started in 2008 by Harsh Jain and Bhavith Seth, two football enthusiasts. 

The whole idea of Dream11 is to increase the involvement of sports lovers in their favourite sports. The growing number of dreamers on the platform has already crossed 60 million in 2019 and is eying to reach 100 million users next year.

The company has received fundings from investors like Tencent and Steadview capital, Think Investments, Multiples Equity, and Kalaari Capital. The total valuation of Dream11 is now over $1Bn and has become the first Indian gaming company to make it to Unicorn club

Dream11 Business Model
Dream11 Business Model

The business model of Dream11

Dream11 provides a platform for users to show their passion and knowledge in sports. Dream11 lets the user create their own team using all the available players in a particular match. Users show their sports acumen and create the best team possible.
After creating teams, user can compete with other users online. During the game, points are given to each player in the team for their performance, and at the end of the game, the user with the maximum points wins the biggest part of the prize money.

How Dream11 makes money

To compete with other users on Dream11, one has to pay the entry fee for the League. The league allows a definite number of users to participate. The entry fee for one league is the same for all the users. At the end of the game, the user with the highest points is awarded the maximum prize, and rank wise the amount of the prize money is decreased. Not all the users win a prize in the league. Basically, the total money put in by all the users in the league is more than the total prize money distributed among the winners. The remaining amount is retained by the Dream11.
For making it clearer, Business Gamut has considered a cricket league in Dream11 with:
Entry fee: Rs. 75
Total Prize Pool: Rs. 3 Lakh
Total Entries: 5333
Total Winners: 2600
As can be seen in the chart given below, the prize will be distributed among 2400 users out of 5333 users in the league. The 1st ranker gets 200 times the last ranked from the prize pool.

Prize breakup in Dream11 league
Prize breakup in Dream11 league

In the below given chart, we can see that the total amount disbursed as the prize money is 73% of the total money put in the league by the users. 27% is retained by Dream11.

Revenue percentage of Dream11
Revenue percentage of Dream11

The expenses for Dream11 are majorly are Advertisement, marketing, Server/ Platform maintenance.

Hope the read was helpful in understanding the business model of Dream11. If you liked the blog, please share it with your friends. Business Gamut would love to listen to your valuable feedback, let us know what else you want to know about the Fantasy sports industry in the comment box.

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