Lost millions of dollars when they were 24 years old a defining moment for entrepreneurs Harsh Jain and Bhavit Sheth.
It felt “pretty awful,” Jain said. “There’s no other way to put it.”
“Every founder, when you start something, you really believe it’s going to explode, you’re going to change the world… and our world fell and fell.”
But the duo from India also knows how to bounce back from setbacks.
More than a decade after their debut, their agency Dream Sports says now worth 8 billion dollarswith 160 million startup users.
Dream Sports is a sports technology company from India that owns Dream11, the largest fantasy gaming platform in the country.
Everyone who is a sports fan has an opinion on how the sport should be played, or which player to choose, the strategy for that match is right or wrong.
Bhavit Sheth
Co-Founder and COO, Dream Sports
Virtual sports are online games where participants can create a virtual group of proxies that follow real sports players. Game participants then earn points and win cash prizes based on these players’ real-world performances.
“Everybody who’s a sports fan has an opinion on how to play the sport, or which player to choose, the strategy for that game, whether it’s right or wrong,” Sheth said.
“What fantasy sports try to do is put that opinion into a more structured format.”
Jain added: “I constantly compare fantasy sports to popcorn for your movie. You get popcorn because it makes your movie better. Fantasy sports do it for sports. . It boosts your engagement and makes that sporting event 100 times more exciting.”
Two men, now 36 years old, spoke to CNBC makes it about how they became the pioneers of an industry worth billions in India — and make their dreams come true.
How it started
Jain was first introduced to fantasy sports while he was studying in the UK in 2001, namely Fantasy Premier League.
“I knew about this thing called great ball game … and got all my friends back home hooked on it too. Bhavit is one of them,” he said.
When Jain returned home in 2007, he began searching for fantasy cricket platforms — given the popularity of cricket in India — but the search was fruitless.
He decided to solve the problem himself.
“I told my friends we have to deal with this… there are a billion Indian cricket fans and they don’t have fantasy cricket.”
Harsh Jain and Bhavit Sheth founded the startup Dream11 when they were just 22 years old — but it quickly “broke and burned”. “Every founder, when you start something, you really believe it’s going to explode, you’re going to change the world,” Jain said.
Sports dream
Jain teamed up with his childhood friend Sheth to launch Dream11 in 2008 — offering free-to-play, ad-based fantasy cricket for revenue.
It also allows players to create an imaginary team for the whole season.
They received “several million dollars” from family and friends as initial capital, but after two years they found themselves short of cash.
“Ad revenue doesn’t come because of…products[s] in India do not understand fantasy sports. They need to be educated,” said Sheth, also the company’s chief executive officer.
“At the time, we asked ourselves, what should we do now? We knew that fantasy sports as a model should work… there had to be some format for it to be. operating in India, we just don’t know what it is.”
From advertising direction to ‘freemium’
Jain and Sheth decided to start a digital company called Red Digital, through which they could “make some money”.
“It was a challenging period, to get something to help us survive that period of crisis when we didn’t have the funds,” Sheth said.
According to him, Red Digital eventually became one of the largest digital companies in India — which helped fuel the growth of Dream11.
In the process, the co-founders decided to pivot the fantasy game platform from being dependent on advertising to so-called “freemium” model.
“In terms of monetization, what we did was integrate contests where you need to pay to enter… and we built a prize pool,” explains Sheth.
Most entrepreneurs forget that sponsorship cannot be taken for granted.
harsh Jainism
Co-Founder and CEO, Dream Sports
“If you win, you win a bonus. Normally, every time someone enters a contest, we keep a certain percentage of the participation amount paid by the user.”
Dream Sports says the average ticket price is 40 rupees, or half a dollar, and top players can win up to nearly $250,000.
Sheth says they’ve also changed Dream11 from a seasonal format to a game-based format, which reduces user engagement from months to days.
Jain added: “That’s how we’ve scaled so far, we don’t have any ads on Dream11, we don’t have them… since we switched to this model.”
Dream Sports claims only 20% of their users are playing for money and has safeguards in place to ensure responsible play. “There are some contests with 10 million people competing against each other. We always try to make sure at least more than 50% of them win back to stay attractive,” said Harsh Jain, co-founder and CEO said.
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That strategy has paid off.
In 2013, as Dream11 was starting to go strong, Jain and Sheth decided to sell their digital company, Red Digital, so they could focus on building Dream11 instead.
Sheth said, “If we had to double into one business, which one would we choose? We both love building products – we’re product people and we don’t like businesses. great service”.
“It’s more of a necessity.”
The the digital company was sold for $800,000, which the couple pumped back to their fantasy sports background.
‘Money is not free’
Over the next seven years, Jain and Sheth began to see the fruits of their labor.
In 2019, the Mumbai-based startup finally joined the ranks of India’s unicorn club — the first sports tech company to do so.
According to news tracking site Entrackr, Dream Sports is currently one of the rare unicorns in India making a profit. In fact, Jain and Sheth say their company has been doing well since 2020.
“Most entrepreneurs forget that funding can’t be taken for granted. Every round of funding we’ve ever had, we’ve always projected a runway of 12 to 18,” Jain said. months, then go to break even and become profitable,” Jain said.
Unfortunately, that’s a very hard lesson to learn that a lot of founders need to learn – that money doesn’t come for free.
harsh Jainism
Co-Founder and CEO, Dream Sports
“If your unit economics doesn’t lead to that, your valuation is wrong, or the money you’re raising is wrong, the fundamentals of your business are wrong.”
That’s what they learned from losing large sums of money in the early days of the company, Jain added.
“Unfortunately, that’s a very hard lesson to learn that a lot of founders need to learn – that money isn’t free.”
This sharp vision fueled the growth of Dream Sports. Dream Sports investors include the Chinese tech giant Tencentas well as US hedge funds Tiger Global and D1 Capital.
In 2021, Dream Sports said raised 840 million USD, valuing the company at $8 billion. In the same year, the company said it grossed $332 million in revenue and more than $40 million in net profit.
Expansion abroad?
Jain and Sheth have come a long way.
Looking back, they say it was their “absolute tenacity” that got them through the twists and turns.
Jain says: “It’s seeing a problem… And you yourself are extremely passionate about it. I think that’s all that most founders need.”
Sheth added: “Perhaps the rest of it, you’ll learn along the way.”
Dream11 currently offers a total of 11 fantasy sports, including cricket, basketball, soccer and baseball.
The secret to Dream Sports’ success? Harsh Jain (left) said: “It’s seeing a problem… And you yourself are extremely passionate about it. I think that’s all that most founders need.”
Sports dream
