Game on for fantasy sports platforms
The suspension of the IPL put them on a sticky wicket; its resumption has them feverishly working to keep users engaged and improve their offerings
Garage-born online gaming startup Playerzpot, which calls itself India ka naya maidan, (India’s new playing field) saw user registrations grow three times per day in April and revenue by 2x over March. But with the suspension of Indian Premier League (IPL), that growth momentum slowed.
The Mumbai-based startup’s founder Sunil Yadav had foreseen this suspension owing to the second wave of pandemic coursing through the country. So, he had a plan B ready. In the absence of physical matches, he concentrated on keeping already acquired users engaged on the platform.
“We are focusing on the casual gaming format and are attracting users and keeping them engaged through games such as Snakes and Ladder, Ludo, Sheep Fight, Housie Quiz, General Quiz to name a few board games,” says Yadav, whose six-year-old start-up had raised $3 million last year.
Still, it’s tough going. IPL is one of the most lucrative and valued sports IPS in the world and most major gaming platforms associate with the league to reach their target audiences and drive engagement. According to reports, big names such as Dream Sport, whose brand Dream11 is also the IPL title sponsor, and Mobile Premier League, a Bengaluru-based esports tournament platform, and others were spending over ~200 crore collectively on advertisements to stay top-of-the mind with viewers. This was publicity that indirectly helped drive the business of other fantasy gaming platforms. “Since the fantasy sports business model is directly linked to live sports, the suspension of the league will definitely have an impact on both top line and revenues,” says Roland Landers, CEO, All India Gaming Federation. He estimates the top line would be 50 per cent down from the targeted numbers for most fantasy sports players.
Now that the 2021 edition of the IPL will be resumed in the United Arab Emirates between September 15 and October 15, some of this revenue will be recouped. Meanwhile, the challenge is to keep users engaged. They are banking on the hardcore fantasy sports gamer with more time on his or her hands owing to the pandemic-induced lockdown. The focus here is to maintain top-of-the-mind awareness through SMS campaigns and personal outreach programmes. “On the non-marquee matches, we have increased our contest cash pool, which would bring more users to our platform rather than going on other competing platforms,” says Amit Purohit, founder, Fantasy Akhada, which recently raised ~5 crore from Prime Securities. For instance, for domestic cricket matches currently taking place in the UK and West Indies, the company has increased the guaranteed cash contest pool by 100 per cent to keep fantasy sports fans in the loop.
There is good reason for those in the fray to hang in there. A report by the Federation of Indian Fantasy Sports (FIFS) and global consultancy KPMG suggests that the Indian fantasy sports industry is expected to be worth $3.7 billion by 2024. This super-growth can be seen in the fact that the market now has some 150 fantasy gaming sites from just 10 in 2016. The FIFS-KPMG report estimates that the past decade has seen a 700 per cent increase in the number of fantasy sports operators and a whopping 2,500 per cent spike in the number of fantasy sports users.
The result has been a spike in interest from private equity and venture capital investors. Dream Sports, cofounded by Harsh Jain and Bhavit Seth in 2008, MPL, founded in 2018 by Sai Srinivas Kiran Garimella and Shubham Malhotra, and Halaplay, founded in 2011 by Swapnil Saurav — all Bengaluru-based — are some of the household names in this segment. Dream Sports, which counts investors such as Kaalari Capital and Tencent as investors, became the country’s first gaming unicorn in 2019; MPL which is currently valued at $945 million, is expected to join the club soon.
In March, Dream Sports, which also Fancode, an ad-free multi-sport aggregator platform, and Dreamx, an allround sports tech startup consultancy or “sports accelerator”, raised $400 million in a round led by American investment firms TCV, D1 Capital Partners and Falcon Edge. This was TCV’S first investment in India, and it took the company’s valuation to $5 billion, making it one of the country’s most valued start-ups. MPL also raised $95 million just before IPL in a Series D round led by Hong Kong-based Composite Capital and New York-based Moore Strategic Ventures.
Overall, the online gaming sector in India attracted $544 million in investments during the August 2020-January 2021 period, with investments likely to double over the next 1218 months, says a report from Maple Capital Advisors, a boutique investment banking platform. This year also saw mobile gaming company Nazara Technologies becoming the first gaming firm in India to get listed. The IPO mopped over ~260 crore from anchor investors even before the listing, which took place in March.
“We believe gaming is now at an inflexion point with greater investment and consumer traction. Clearer category leaders are likely to emerge and we expect improved regulatory coverage or judicial clarity, especially in the real money gaming space,” said Pankaj Karna, Founder and MD, Maple Capital Advisors. But some states such as Andhra Pradesh and Telangana having banned fantasy games that involve financial transactions has impacted the business of the big players in these regions.
Meanwhile, fantasy sports companies are taking this period before the resumption of IPL as a sort of half-time to regroup and improve their product incorporating the feedback they get from new users who came on board during the tournament. With a crowded arena built around IPL, they’ll have to bring their best game to the table.