Dream Sports, the parent company of Indian Premier League’s official partner Dream11, is in probing talks with investment banks for a US listing by early next year, joining the league of Indian tech unicorns preparing for overseas listings.

Dream Sports may raise about $1.5 billion through the listing, valuing the company at $6 billion, an almost 40% increase from the funding round that concluded last month, stated at least three people aware of the plans.

Investment banks Morgan Stanley, JP Morgan and Citigroup are among those that made presentations to the company in the first week of April. No firm initial public offering (IPO) permission has been given and neither has the quantum of fundraising or the timeline.

“The bankers have made presentations. The company indicated that the next round of fundraising could be through a listing. So talks are in that direction,” one of the people
stated.

There are indications that Dream Sports may tap a listing via a special purpose acquisition company (SPAC), or blank cheque company, in the US.

Harsh Jain, co-founder of Dream Sports, is a board member of Think Elevation Capital Growth Opportunities, a SPAC launched by Ravi Adusumalli and Shashin Shah paying attention on Indian tech companies seeking to list in the US.

The planned listing may consist of both a primary and secondary sale of shares. Some of Dream Sports’ early backers may use this opportunity to exit, stated people with direct knowledge of the matter.

Mails sent to Jain on Saturday remained unanswered as of publishing this story. A company spokesperson did not immediately respond to the queries.

Jain told in an interview last month that unlike many of his peers, he won’t be tapping the public markets just yet. “We have no plans to IPO. We want to go public as a sports-tech company. For that we need to have a substantial portion of our business coming from non-fantasy sports,” Jain had stated then. Instead the company will look to diversify its offerings even as it has turned profitable. Jain, however, did not offer details of the company’s financials.

Dream Sports raised $400 million last month from tech investors including TCV, D1 Capital Partners and Falcon Edge, while existing investors Tiger Global, ChrysCapital, TPG Growth, Steadview Capital and Footpath Ventures also participated. The investment increased the company’s valuation to $3.6 billion from $2.5 billion in September 2020, when it secured $225 million in funding from Tiger Global, TPG Tech Adjacencies and ChrysCapital.

All investors, including early investors such as Multiples Alternate Asset Management and Kalaari Capital, together hold about 80% in Dream Sports.

Set up in 2008, the sports technology company became the first Indian gaming startup to enter the unicorn club and has raised about $720 million so far. In 2019, Dream11 generated revenue of Rs 775 crore compared with Rs 224 crore in 2018, as per the company’s annual filings.
For several years, the Mumbai-based company had failed to woo investors and remained entangled in legal battles as virtual betting or fantasy sports was considered illegal in India. However, a favourable court order in 2017 removed the legal hurdles. Even though it is still not available on the Google Play Store, it has 100 million users and it is growing.

“They do not require further cash right now. However, towards next year, they may require another fund raising and that will be through a listing process, for which negotiations have already started,” another person stated.

Dream11 won the title sponsorship rights for the 2020 edition of IPL for Rs 222 crore and is one of the official partners. The company has also been collaborated with the International Council of Cricket, Indian Super League, Big Bash League, National Basketball Association, Caribbean Premier League, International Hockey Federation and Pro Kabaddi League.

Just as in the US, online gaming has grown exponentially in India over the past two years. Recently, the Mobile Premier League raised $95 million in a Series D round and is poised to join the billion-dollar valuation club. Mobile gaming company Nazara Technologies became the first gaming firm in India to get listed. The initial public offering mopped over Rs 260 crore from anchor investors before the listing.