How Dream11 makes Rs 2554 Cr in revenue & Rs 327 Cr in profits?

How Dream11 BURNS Rs 1250 Cr cash on ads but still makes Rs 327 Cr in profits? Let's find out!

4th August 2022
4 min read

In a nutshell

From schooling in London, to university in Pennsylvania, Harsh Jain grew up with fantasy football. When he came back to India, fantasy games were non-existent.

When IPL was launched in 2008, Harsh was stoked. He and his friend Bhavit Seth started working on building their very own fantasy game!

When Dream11 started out, the gaming industry experts all declared it to be the worst idea ever. And, they weren't wrong. Why? Well, there are several reasons:
1. Harsh had borrowed money from his parents and he was quickly running out.
2. Dream11 was running as a free app with ads

3. Finally, instead of focusing on the fantasy game element, they created a bunch of different features like blogs, forums, casual games and more!

The cluttered app, plus no incentive for players had the initial team tanking.

For a while, Dream11 became a side project and Harsh had to focus on his services business. But, after they saw some success there, they came back to Dream11. After dumping all the extra features & making Dream11 into a paid app, the team was set on a track to fantasy game domination.

But, how does Dream11 work?
Well, here's a short explanation:
Players join different contests for a particular live game by paying entry fees. The money from all these players makes the total money pool.

75% of this money is distributed to the winning players and the rest 25% goes to Dream11. This is ofcourse in a case when Dream11 is able to fill all the spots for a contest.

This model has resulted into very strong unit economics for Dream11. So much so, that, after spending a massive Rs 222 crores on IPL ads, Dream11 makes the money back in half an IPL season!

On the night of 2nd April 2011, a collective population of 1.3 billion people yelled in applause as the Indian cricket team won the world cup for the first time in 28 years.

Indians LOVE cricket!

We LOVE watching it, we LOVE tweeting about it, but more importantly, we LOVE yelling at the TV screen with our hot takes — "Man! Why did he have to take that run!" Or "Sehwag should have opened"

Long story short, Indians can't get enough of this sport. So, in 2008, when the first IPL season was launched, young entrepreneurs Harsh Jain and Bhavit Sheth thought of capitalizing on it.

They launched their fantasy sports startup Dream11 & scaled it to INR 2554 crores revenue & INR 327 crores profits!

But, on the back of India's cricket obsession, how did this fantasy "game" become an $8B company? In today's article, we break down just that by dissecting how Dream11 makes money. Let's dive in!

How did Dream11 begin?

Obsession with fantasy football

Harsh Jain spent his schooling years in London, completely obsessed with football supporting Manchester United. That means watching league games and playing fantasy football with friends all the time.

But, once he graduated from the University of Pennsylvania in the US and came back to India, he realised that people were not as obsessed with fantasy games as opposed to people in the UK and the US.

As a 22-year-old, in 2008, Harsh was busy working at his family business Jai Corp when league sports entered India in a BIG way!

Indian Premier League (IPL) made a debut & collectively 1.3 billion people were hooked!

Harsh was also incredibly stoked. Finally, he had a league game to play fantasy sports with his friends. So, he immediately set out to look for a fantasy game. But, he couldn't find any.

After a small discussion with his partner, Bhavit Sheth, the duo decided to create their own fantasy game around IPL called Dream11.

Dream11 becomes a side dream

When Dream11 started out, the gaming industry experts all collectively declared it to be the worst idea ever. And, they were not completely wrong.

Version 1 of Dream11 was like a flight that never took off. In the offset of IPL, the timing was perfect for a viral fantasy sports game. But, the product was just not right.

Harsh had borrowed money from his parents to fund Dream11 and he was very quickly running out of money. So, he had to find another way to keep the lights on & pay his employees.

They decided to start a digital marketing agency called "Red Digital" & moved all their employees to work in this services company. That's except for the 11 people who were still trying to keep Dream11 alive.

The services business took off. The agency bagged a contract from Mumbai Indians & started managing their Facebook page. In less than a year, they managed to get a million likes on the team's page - practically unheard of in the early 2010s.

They were finally seeing some success, but Harsh knew this was not the end game.


Start as a service, buildd product later.

Pivot from Ads to No Ads

At the end of 2014, they decided to completely revamp Dream11.

Dream11 => Version 1 - Ads

Version 1 of Dream11 was a chaotic mess.

You see the app was completely free to use and the team primarily made money by running ads and promotions. But, apart from the Fantasy sports element, Dream11 was no different than any other sports game. Just another fish in the sea!

Plus there were a few more problems

  1. No incentives - Only the top 4-5 players won any prize. So, there was little incentive for others to play the games.
  2. Season-long competitions - You had to draft a team for the entirety of a tournament and commit to playing the same team. Since IPL seasons last 2-3 months, this model required too much commitment on part of the users.
  3. Too many features - On top of this, Harsh had gone all out and built a forum, blog, casual games, news, live score and more. The goal was to make Dream11 into a Sports Super App. But, that was a total overreach for a company that doesn't have many users.

With these factors in play, the company lost money for the first 3 years.

Dream11 => Version 2 - No Ads

So, now in version 2, they flipped the entire model upside down.

  1. They switched from Free games & Ads => Paid games & No Ads. Sounds counterintuitive, but it worked!
  2. They also offloaded all the additional features and completely focused on building a good fantasy game.
  3. And finally, they moved to daily competitions instead tournament long games.


  1. Don't try to solve for all problems at once. Figure the most critical ones & solve for them first. Iterate and solve for the rest in later versions.
  2. Unless you realise that the absence of a certain feature has created a bottleneck in business outcome, it is surely an unnecessary feature.

They realised that for them to become a successful business, they'll need to attract more users, so they experimented with different incentive models to land on something that now generated them Rs 300+ crores in profits & 130M users!

Let's learn more about this model.

Minting money through Cricket

How does Dream11 work?

Well, it's quite simple!

  1. Let's consider an IPL match for example. Suppose X wants to enter a contest for the Mumbai Indians vs Chennai Super Kings game.
  2. X will then have to enter into a contest which has a specific:
    • Entry fees
    • Prize Pool
    • No. of spots

    Depending on the contest X enters, their odds of winning will change. The odds are usually around 50% & sometimes even more. Although as the rank decreases, the amount you win also decreases.

  3. Once X enters the game, they will have to draft a team of 11 players by selecting players from both MI and CSK. Before the match starts, depending on the actual lineup, X will shuffle around teams and lock in the lineup.
  4. Beyond this, X can't do anything. They will be assigned points based on how their players play in the actual game.

So, how does Dream11 make money?

Well, let's understand this by taking the example of the 2020 IPL season. That year, Dream11 spent Rs 222 crores, to become the title partner of IPL. But, how did they make that money back?

  1. The 2020 IPL season had a total of 60 matches.
  2. For each of these matches, Dream11 has up to 100 different contests that are a combination of:
    • Different prize money pool => Total amount that's distributed among winners
    • No. of spots => Maximum number of people who can participate
    • Entry Fees => This can be as low as Rs 3 or high as Rs 10K
  3. Let's say conservatively,
    • 10M people play Dream11 for every match.
    • And, an average entry fee of Rs 25.
    • Then, the final money pool has => Rs 250M = Rs 25 crores
  4. Now Dream11 optimizes for 100% capacity and keeps the prize pool to be 75% of the total money pool. So, they can take home ~25% commission

    Total Prize Money => 25 * 75% = ~Rs 18 Cr

  5. So, now Dream11 makes 7 Cr in revenue in the duration of just this one match!

Since its total spend was Rs 222Cr, it'll take Dream11 => Rs 222 Cr/ Rs 7 Cr = ~32 matches to make the money back!

Dream11's big dreams!

Dream11 is one of the few companies that is burning Rs 222 crores on IPL ads and totally a whopping amount of Rs ~1250 crores to still generate almost 13% profits.

There are several reasons why burning cash works for a company like Dream 11 and not so much for a company like CRED, Unacademy or even Upstox.

  1. Firstly, Dream11 has a clear path toward monetizing these new users, unlike CRED or Upstox.
    • That's partly because of the strong unit economics of their model
    • But on top of that, their revenue hinges on the number of players participating. So, the more the money pool, more is Dream11's share.
  2. Secondly, Dream11 is an addictive game that offers very high incentives for very low prices. They also make sure to nudge you to play more by
    • Giving discounts & referral prizes
    • On top of this, they have a very clever strategy where you can only withdraw Rs 200 or more from your Dream11 account. If you have won anything lesser than that, you'll keep going back to win more.
  3. Finally, a fantasy game is a tried and tested model in other countries. It's existed in the US for a while and people don't seem to be over it yet.

So, by carving out a space for fantasy sports games in India, Dream11 has set off an irreversible change where watching sports and playing fantasy will always go hand in hand.

Now, for the parent company Dream Sports, Dream11 is just a great cash cow that'll help them create a true sports conglomerate.

But, everything is not all good news for Dream11. The company has been battling legal forces for a while now. Essentially on the surface, Dream11 looks like a gambling game. They are able to keep off the ban on the grounds that they are a game of SKILL and not CHANCE.

But, there's no telling if the court judgement flips and sinks Dream11 on its way.

For now, Harsh is hinging his hope on Rahul Dravid's words - "You don't win or lose the games because of 11 you select. You win or lose with what those 11 do on the field."


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It all started in 2012 when Sumeet Mehta, an IIMA grad & Smita Deorah, a chartered accountant moved from their cozy life in Singapore to India.
Both Sumeet and Smita were very passionate about helping young children from low-income communities.

When they realized that the major problem plaguing these communities was the broken schooling system, they decided to fix it!

They first approached this by starting schools in rural India. But, they soon realized that it wasn't enough to create a large-scale impact.

So, the couple took a different approach.
They started working to improve the curriculum of schools already operating, rather than opening new schools.
This entire concept gave birth to LEAD, as we know it today, in 2017!

LEAD vs Byju's - how are they different?
1) LEAD operates on the idea that students already spend a sizeable amount of time in school & tuition.

2) Sumeet & Smita realized that we don't need another 10-12 companies fighting for these students' attention. Instead, improving the schooling curriculum should be a priority.

3) So, LEAD's core offering is a full-fledged solution for private schools.

Well, LEAD is currently working with 2000 schools & ~800K students.
Here are their numbers: 1) Revenue — INR 57.1Cr 3) Net Loss — INR 126.1Cr
So, essentially LEAD spends INR 3.27 to make a single rupee! While it has managed to become India's newest ed-tech unicorn!

Unacademy IPL Ads Spend - Was the 40 Cr ads spent worth it?

Unacademy started out as a simple college hobby for a co-founder, Gaurav Munjal. In 5 years, it was built into the actual company with a free tier and a subscription model.

Being the 2nd largest ed-tech startup in India, Unacademy enjoys a lot of attention from VCs.

Its current valuation is $3.44B, after it raised a $440M funding round in 2021. Much like any other VC-funded startup with deep pockets, Unacademy naturally spends a huge amount on growing its user base.

Given the wild popularity of IPL in India and that most of their target audience tunes in to watch IPL, Unacademy spends a ton on IPL ads.

1) Overall, in 2022, Unacademy spent Rs 40 Cr on IPL ads in 2022.

2) Their target audience accounts for over 40% of IPL’s total 20 Cr viewership, which is 8 Cr target audience.

3) Unacademy's paying user conversion rate = paying users/net users = 350K/30M *100 = 1.1%.

4) Traditionally, the TV ad conversion rate is 0.7%. So, net net the paying users = 8 Cr x 0.7% x 1% = 5600 users.

5) We finally get the customer acquisition cost (cac) = Rs 40 Cr/5600 users = Rs 72K/user

6) If we say that on average the course fee is around 10K. Unacademy still is burning ~60K per user acquired.