Sporta Technologies Pvt. Ltd, which operates fantasy sports platform Dream11, saw its profit decline 56.7% to Rs 142 crore in the financial year FY22 from Rs 327.1 crore in the fiscal before, as a sharp rise in expenses weighed down on its 50% growth in operating revenue.
The Tiger Global-backed company’s revenue from operations surged to Rs 3,840.8 crore during the year, as compared to Rs 2,554.4 crore in FY21, as per its audited financials available with the Registrar of Companies (RoC). It also earned Rs 224.3 crore as interest on current investments, taking its total income to over Rs 4,000 crore.
Dream11 primarily earns from the platform fee received from users who participate in real-money, fantasy sports contests available on the platform. The platform claims to have more than 150 million active users across the globe.
Founded in 2007 by Harsh Jain and Bhavit Sheth, Dream11 competes with MyCircle11, Halaplay, Mobile Premier League (MPL) and BalleBaazi, among others.
For comparison, Games24X7 incurred a net loss of Rs 282 crore in FY22, its first loss in the last 12 financial years. MPL, on the other hand, made a loss of Rs 148.2 crore with operating revenue of Rs 65.6 crore in FY22.
Dream11 last raised Rs 6,248 crore in a funding round from Alpha Wave (formerly Falcon Edge), DST Global, D1 Capital, Redbird Capital, TPG, Footpath Ventures and Tiger Global at an $8 billion valuation in November 2021.
In FY22, Dream11’s expenses jumped 70.2% to Rs 3,762.4 crore from Rs 2,210.3 crore in the fiscal before.
Advertising and promotional expenses, which accounted for more than half of its cost, surged 72.8% to Rs 2,158.3 crore from Rs 1,249.2 crore in FY21, owing to its title sponsorship of the Indian Premier League.
On other hand, its employee costs increased to Rs 496.5 crore from Rs 276.5 crore in the fiscal before.
The company also reported miscellaneous expenses of Rs 1,050.4 crore in FY22, up 62% over last year. It did not disclose details about this expense.
Dream11, like its peers, has been caught amidst regulatory hurdles. Recently, the Indian government, on 3 January, proposed an amendment to the IT (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021, to regulate the online gaming market in the country.