Fantasy fever spreads to sports fans
The coronavirus pandemic tore through the sports calendar with major sports leagues and events postponed keeping social distancing measures in mind. Recent months have been a blessing for sports fans all over the world as players meet on the field again. Yet something has changed. No, we’re not talking about the empty stadiums or the weird broadcast generated crowd noises. We’re talking about people cheering when a batsman of the team they support gets clean bowled. The reason? The bowler was on their fantasy team.
Fantasy fever has gripped lovers of sport all over the globe and has allowed fans to feel more involved in the game at a time when stadium attendance has not been possible. There has been a substantial acceleration in the adoption of simulated sports and the return to sporting action has served fantasy sports platforms incredibly well. The popularity and brand value of players in different sports, increasing investment in internet infrastructure, and growing number of internet users are the major factors driving the sector onwards. KPMG data shows that overall revenue for Online Fantasy Sports (OFS) operators has increased by almost 3x in the past financial year from around INR 9.20B in FY ’19 to INR 24.70B in FY ’20. OFS platforms typically operate on a freemium model with entry prices charged for certain contests.
The Online Fantasy Sports segment in India is growing at a tremendous CAGR of 32% and is expected to reach $3.7B by the end of 2024.The rapid growth in the sector has meant that there has been a corresponding growth in investor interest. In a funding round led by Tiger Global Management, TPG Tech Adjacencies (TTAD), ChrysCapital and Footpath Ventures, Dream 11 raised $225M at a valuation of close to $2.5B. Mobile Premier League, which has signed a deal as apparel sponsor of the Indian Cricket team for the next three years, raised a $90M Series C round led by SIG, RTP Global and MDI Ventures.
The rising consumer interest and engagement with these platforms is evident from the manner in which website traffic has exploded in recent months. Dream11, FanFight and Ballebaazi have seen website traffic rise of 3131%, 1246% and 1033% respectively over the past six months in Oct ‘20.The platforms have bolstered their workforce over the past year to meet the rising demand. Dream11, FanFight, Halaplay, and MPL have seen YoY growth in employee strength of 76%, 35%, 16% and 167% respectively.
Outside India, the OFS market in the US has been growing rapidly since the Supreme Court ruled that individual states could legalize sports betting. DraftKings and FanDuel are the clear leaders in this sector with them occupying 40% and 35% of the market share of the US sports betting market. Draftkings and FanDuel have grown their website traffic by 378% and 266% over the past six months and strengthened their workforce by 23% and 33% respectively over the past year in Sep ’20. They have also seen the number of ratings their apps receive skyrocket by 906% and 1597% respectively in the last six months in Oct ’20. Draftkings has seen its stock price rise 5x since Jan ’20 from $10 to $50 in Nov ‘20.
As fans across the globe invest in players to get points and even earn money, investors would do well to take a punt on these Online Fantasy platforms to see significant returns.
