Updated: Cricket in India is the equivalent to soccer in much of the world, or football in the U.S. — it’s a national past time and an industry that generates billions of dollars. So there’s a good chance that in the same way that fantasy sports leagues on the web have become a popular pastime in the U.S., cricket fantasy leagues could one day become a massive industry for the rapidly growing number of Indian web and mobile users.
During a trip to Mumbai with the Geeks on a Plane group last week, we met with Dream11, a startup looking to develop the go-to site for fantasy cricket leagues. The company has been working on the site for the last two years and now has 600,000 users, and in recent weeks launched an online payment system that enables players to pay to create fantasy cricket teams and win money when their teams win.
Dream11′s founder Harsh Jain told our group that his company is the only online cricket fantasy league out there that has been approved by
the Indian government some of India’s top lawyers as “a game of skill” so it’s legal for players to win money and not considered betting, which is illegal (Updated). The fact that the Indian government could crack down harshly on any Internet company it thinks is promoting online betting, means that Dream11 for the time being has a sizable moat around its business.
Jain also estimates that there is a $50 billion market of under-the-radar cricket betting (offline and online), and if Dream11 can convince some of those bettors to play legally on Dream11′s site, it could tap into this sizable quiet black market.
It took the company two years to finally clinch the government approval, and Dream11 also took those years to figure out its strategy and focus. Harsh says the company spent its first amount of private capital raised developing the site and more recently cutting everything from the site that wasn’t focused on fantasy cricket leagues (like cricket news and content). Now Dream11, with its more streamlined focus, will work on growing its site with the new payment system.
Jain says that Dream11 also recently scored verbal agreements from credit card companies to start its online payment system. Building a credit card payment system in India is no small feat. The majority of e-commerce sites are based on cash on delivery (you order a good online and then pay for it in cash when it’s delivered) largely because there are a very small amount of credit card users in India.
Similar to other Indian web companies I’ve interviewed and met with over the past two weeks, the founders of Dream11 also have another line of business that is helping cover the costs of Dream11. Called RedDigital, the team also runs a digital media and marketing business for large brands. Having the other division has helped the company manage costs (RedDigital subsidizes Dream11) and also the consultancy has shaped the business of the fantasy cricket league — Dream11 white labels its web cricket league for large brands in India.
Jain says Dream11 isn’t interested in raising funds right now, but eventually if the site successfully grows out its payment system the company will be looking for money down the road to scale.