Harsh Jain of Dream Sports: Living the fantasy

Founded in 2008 by Jain and Bhavit Sheth, Dream Sports has over 250 million users, a workforce of 1,200 employees in Mumbai and a diversified portfolio of companies that includes Fancode for sports content, Dream Set Go for sports travel and Dream Sports Foundation to work at the grass-roots of sports. Post-acquisition by Dream Sports in 2021, Rolocule Games, a mobile game developer, was rebranded as Dream Game Studios, which launched Dream Cricket for a free-to-play mobile game.

“Sports content, sports data, sports gaming and sports commerce, to a small degree, are the four businesses that we are really keen on. But out of this, sports content, gaming and data are the things that we see still under-tapped in India," says Jain.

He is seated in a conference room named Manchester United, after his favourite football club, in the Dream Sports office at the Bandra-Kurla Complex in Mumbai. Their offices, on two floors, are filled with sporting symbols, photographs, and rooms named after Real Madrid and Kolkata Knight Riders, among others. Having just come from an office football game, dressed in a lavender shirt and white sneakers, Jain tucks into some home-made food as he chats.

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Born and brought up in Mumbai, Jain went to Greenlawns High School where he met Sheth, both of them part of the generation that got exposed to English club football at a time when Manchester United was an all-conquering, all-star team. In boarding school at Seven Oaks in Kent, UK, Jain got introduced to fantasy football, which was to become a passion, a career goal and the origin of the multi-billion-dollar business. “In the UK, fantasy has been on for decades, so you are not a real sports fan unless you have a fantasy team," says Jain.

Fantasy sport allows people to build their own virtual team of real players—across sports—real time during a series or season and compete with others online.

Through the six years he was abroad, including four years of engineering at the University of Pennsylvania, US, fantasy football became the way for Jain to stay in touch with friends. Following a brief internship with Microsoft in Seattle, Jain returned home to the family manufacturing business, Jai Corp. Ltd, at a time when his father Anand was working on a project for a special economic zone (SEZ).

For an engineering student, the idea of contributing to building a city seemed pretty cool, but when he realised it would take about two decades to reach fruition or double the life of a 21-year-old fresh graduate, it lost some sheen. Bored with the slow pace of movement, paperwork and permissions, a timely distraction for Harsh came in the form of the Indian Premier League (IPL), which was launched in 2008.

Surprised at the lack of adequate options for fantasy cricket, Harsh would have long conversation with friends about wanting to do something in the field. But unlike other discussions of the kind, forgotten the morning after, he stayed loyal to the thought, along with Sheth.

Anand, who had broken away from the family transport business to start Jai Corp., understood the value of wanting to do something on your own, but not without reservations. “Of all the things I could have done, I pitched to a man of finance and real estate a sports tech gaming idea, which has no assets, no inventory, nothing real to hold or to touch," Jain says smiling.

“The concept of losing money to create a follower base, to monetise that later through advertising, was so out of left field… because at that time, the biggest social network in India was Orkut and it wasn’t successful in monetisation."

His father reluctantly put in ₹2 crore in the project besides some money from friends. Jain and Sheth started their company, learnt how much it costs to build a site and within a few months, went back to Anand for an additional ₹10 crore. “Obviously, his reaction was explosive, saying I have no value for money, no sense of how to run a business, etc.," says Jain, now a father to two sons, seven and two years old.

His mom came to the rescue, a dramatic parley ensued, and Anand parted with more funds. “What does a 22-year-old do with ₹10 crore? We built everything at the same time, going away from the core focus. We had cricket live scores, news, games, commentary, quiz, blogs, forums, polls and a cricket social networking. By the time we got the bloody thing done, fantasy cricket was just a hero product."

The free-to-play, advertising-driven business model burned through ₹9 crore in about one-and-a-half years with ₹1 lakh in revenue. By 2010, Jain felt like a failure, unable to go back to dad anymore. The two partners pivoted to a social media agency, Red Digital, got money from servicing, learnt how to sell, and kept a few people on the side working on Dream11 as a pet project.

“It kept the dream alive, if you excuse the pun," Jain says, grinning.

In 2013, the founders sold Red Digital to digital agency Gozoop for $800,000, put the money back into Dream11 with the conviction that they would build a fantasy sports platform without other riffraff. Between 2012-14, Jain was also pursuing a master’s of business administration degree from Columbia Business School, so he considered raising money from the US. “For all the pros of being born with a silver spoon and not having to worry about basic needs, the one thing that went against me is that every venture capitalist looks at a rich boy and is obviously going to wonder if tomorrow I’d wake up and go run to some other thing. They also want to see commitment—that’s hard to show in a Series A."

Over that one-and-a half-year of pitching, Jain and Sheth have counted, there were over 150 rejections. US investors told them that an Indian company with Indian founders and audience should not be pitching in the US or “just a nice way of saying no". A few days before leaving the US, he met Vani Kola of Kalaari Capital through Kunal Bahl of Snapdeal—a UPenn connection—at a coffee shop, going through the quintessential back-of-a-napkin number crunching. Between 2015-18, there were four series of fund raises, including $100 million from Tencent besides Kalaari, before a secondary round in 2019 turned Dream Sports into a unicorn. Jain turned a corner when Dream11 became the IPL title sponsor in 2020.

I ask him how they could retain optimism through these rejections. “You could see that users were playing again and again, without today’s fancy bonuses or incentives, inviting their friends to play. So, you could literally see the numbers shooting up," he says as means of validation. “You have to have family support—it’s underrated," says Jain, who got married in 2014 to childhood sweetheart Rachana. She provided him with moral support, while Sheth helped traverse the lonely journey.

“A lot of people, in India especially, celebrate raising money. But you’re basically diluting ownership. I don’t know why people made peace with the fact that it’s okay for founders to have 3-5% of their company. I’m fortunate that I had family money. If you don’t have it, then you hope you can be 5% of a $10 billion company. which is better than owning 50% of a $10 million company, right?"

Of all the revenue that comes in to Dream11, Jain explains their model, 85% is returned to users as prize money and 15% is kept by the platform as a fee. About 50% of the users win 85% of the money. Around 22% of their users come from the top 115 cities, while the rest are from outside of tier 1 and 2. “It’s not like a few people win crazy amounts and everyone else loses money. About 99% of our users have never won or lost more than ₹10,000 in their lifetime with Dream11," he adds.

In 2023, 453 people won over ₹1 crore on Dream11, according to the company’s data. Their biggest challenge, over the years, though, has been the legal aspect of fantasy sport—whether it should be classified as betting or gambling. With disruptive industries, Jain believes, there will always be this grey zone. “But therein lies the opportunity—if it’s black and white, then everyone’s going to jump on the opportunity like quick commerce today.

“For us, that was an advantage that no Goliath came in. Big corporations need that legal sign off to get into this and by the time they got the legal sign off, we were big enough," says Jain, also the president of the Federation of Indian Fantasy Sports.

Several high courts have declared the format of fantasy sports as legal, one that requires skill and judgement and is protected by the Constitution as a legitimate business. This judgement was further ratified by the Supreme Court a few years ago, while dismissing challenges to the high court orders.

India has over 300 fantasy sports platforms, like MyTeam11, My Circle11, Fan2Play, among others, with a cumulative user base of over 180 million, according to a Deloitte India and Federation of Indian Fantasy Sports report from last year.

Over the course of the last decade and more, Anand has come around the idea of his son’s business. “The day we became profitable, he fell in love with the business," Jain says. “He’s an old school guy. He can’t understand discounting bonus, adjusted EBITDA, etc. He understands free cash flows. And he remains my largest unpaid adviser."

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Arun Janardhan is a Mumbai-based journalist who covers sports, business leaders and lifestyle. He posts @iArunJ.