The real players of IPL 13
One of cricket’s most anticipated events, the Indian Premier League, christened Dream11 IPL this season, wrapped up a few weeks ago in Dubai. Following months of speculation over the necessity and execution of India’s annual cricket bonanza in the middle of a worldwide pandemic, IPL 13 was announced with fewer matches, stringent safety procedures, and an entirely different set of partners. However, the world remains in an economic slowdown, and the stadiums, once teeming with screaming fans that Indian cricket is so well known for has become a murky memory.
This naturally makes one wonder: who are these startups that put their money in IPL? And more importantly, why? The answer may surprise you.
Cred
The number of startups nowadays heralding true innovation has been sidelined by those whose sole purpose is to become a third party shaving off a few seconds in simple procedures. At first glance, Cred looks like the same. An app that brings together all of your credit cards and helps pay for transactions on time. Join and win exciting cashback and discount offers. Simple enough. However, a closer look reveals far more interesting details.
Founder: Kunal Shah(ex-CEO of popular online wallet Freecharge)
Year started: 2018
Valuation: $450 million
Investors: Sequoia Capital($30 million), Ribbit Capital, Gemini Investments($120 million), Greenoaks Capital
What makes it unique?
- Exclusivity plays an important part in Cred’s working. Members have a CIBIL score of 750, thus favoring users with higher financial awareness and soundness.
- In the words of the founder, Cred is looking for “achieving scale rather than revenue generation”, and with the number of users increasing by around 6–7 times during the IPL season, marketing seems to have paid off well.
How does it make money?
Here is one of the most intriguing things about Cred. While nobody really knows how this rising superstar of a startup generates its revenue, a bit of digging in points towards a likely source: data monetization. When a user creates an account, they collect information like name, date of birth, PAN card details, any transaction details, types of service a user requests, payment details, order details, etc. Have a look at some of the terms and conditions that Cred asks its users to comply with, most of which a majority of users don’t bother completely going through.
This begets the question, of course as to while this is legal, is it ethical? To be clear, they are not selling data. Third parties are paying CRED to analyze user data and suggest their products to the Cred user who is most likely to be interested. Many tech companies already use data monetization as a source of revenue, but its ethics are still questioned.
While this form of revenue generation remains speculative and a matter of opinion, Cred looks to grow big time in the next few years. With credit card spending in the last 3–4 years going up from $1.8 billion- $8.5 billion a month and the Indian credit card industry expected to grow at a CAGR of more than 25% during 2020–2025, Cred might have hit the sweet spot. Lowering the CIBIL score requirements would and another few marketing campaigns like this one would make that 3 million user base way bigger.
Dream11
The startup characterized as a revolution in the sporting industry, Dream11’s recent valuation as a billion-dollar company has cemented its position as one to look out for in the future. Dream11, India’s biggest sports gaming app controlling 90% of the sports gaming market currently, lets users select teams and play in matches against one another and put down money for the same. Controversial in its decision to allow players to bet money on matches in a country where gambling is illegal in all but three states, this startup has wriggled its way to the top.
Founder: Harsh Jain
Year started: 2008
Valuation: $2.5 billion
Investors: Tiger Global Management($225 million), Tencent($100 million), Kalaari Capital, Sequoia, etc.
What makes it unique?
- Catering to the Indian market by allowing players to play one-day matches rather than a whole tournament, assuring more daily users rather than those who do not have the stamina to continue for months of playing
- There are no ads on the app, and neither will there ever, be according to its founders.
- Makes its revenue(750 crores in 2019) from only 15% of its user base(around 8 crores this year)
- Roped in Mahendra Singh Dhoni as their brand ambassador, seeing an increase of 10% users betting money on matches
How does it make money?
By taking a cut of the money betted(platform fees of 15%)
The position that Dream11 finds itself in is a very special one and is poised to become even bigger than before, rivaling e-commerce giants that previously held both the captivation of investors and the public. A High Court ruling in 2017 after a case filed by a disgruntled player who lost Rs. 50,000, tilted in the favour of the company, and did not deem it gambling, rather a “game of skill”. After this, a self-regulatory body for sports gaming(Indian Federation of Sports Gaming, or IFSG) was created to regulate the actions of similar platforms and has 17 members as of now. This body is rather conveniently overseen by Harsh Jain himself and no doubt remains as to who the body would be cushioned to help. Combined with the strong growth of the platform further bolstered by the possibility of sports betting’s possible legalisation, would prove no stopping for this giant. Dimaag se khelo, indeed.
Unacademy
Starting as a YouTube channel in 2010 by entrepreneur Gaurav Munjal, Unacademy has certainly come a long way from its humble beginnings. Established as a startup formally in 2015, this company has grown to become one of the most recognised names in the edtech industry. By providing quality education from several credible sources through short videos, what more could an aspirant(and their parents) ask for?
Founders: Gaurav Munjal, Roman Saini, Hemesh Singh
Year started: 2015
Valuation: $2 billion
Investors: Softbank Vision Fund 2($150 million), Facebook($110 million), General Atlantic, Tiger Global Management, Dragoneer Investment, etc.
What makes it unique?
- With Unacademy, students can learn the same topic from dozens of teachers through free and paid videos in over 14 languages, unlike their competitors where topics are covered by a single teacher at a time.
- Their beginnings as a YouTube channel gave them an existing loyal customer base who were comfortable with Unacademy and were ready to continue with them to their next level.
- A diverse range of collaborators such as Virat Kohli, Gita Gopinath, Kiran Bedi has established Unacademy as a brand known across various domains.
How do they make money?
The startup’s primary revenue stream comes from its paid subscriptions under the Unacademy Plus model. On a buying spree, Unacademy has acquired a large number of companies including Mastree, Kreatryx, and recently Coursavy, establishing their position as one of the leaders in the edtech space.
The points above, coupled with the 100 million monthly views it garners over its platforms, indicates that Unacademy is definitely a startup to look out for. However, not everything has been sunshine so far. A data breach this past May led to 22 million accounts being put for sale on the dark web, a claim that the company has disputed, assuring users that no sensitive information has been leaked. Viral videos on YouTube from tutors “exposing” Unacademy has been increasing recently and could be detrimental to the company’s reputation. Hopefully, these are a few minor bumps, and Unacademy finds itself at only the beginning of a long road ahead.
The success of IPL13, with a record of 360 million viewers despite the pandemic, is the success of its sponsors. Taking a bet with this season, these startups with their unique brands and creative marketing campaigns, have become household names. Now with IPL looking to return to normal soon, one can hope to see more of these three in the seasons to come.
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