Dream11 is one of the nine firms that had turned Unicorn this year but with a difference. In its financial performance during FY19, unlike others, the company’s revenues kept up with the expenses.
The Mumbai-based fantasy sports platform had turned Unicorn in April this year when it raised over $60 million from Steadview Capital. For the unaware, Dream 11 allows users to play fantasy games in genres including cricket, football, kabaddi, and basketball.
While the revenue of the fantasy gaming firm took a leap of 3.5X to Rs 775 crore from Rs 224.64 crore in FY18, total expenditure recorded a little over three-fold growth to Rs 935.05 crore from Rs 293.33 crore in FY18.
Expenses on advertising and promotion, including promotional credits and reward schemes make up 84% of the total expense for the company. Dream11 spent Rs 785.08 crore on ads and promotions alone, up 3.4X from Rs 230.3 crore in the last fiscal.
Employee benefit expenses also grew by 2.5X to Rs 66.4 crore in FY19 from Rs 26.52 crore in the preceding fiscal. Dream11 spent Rs 41.3 crore in IT expenses to operate its mobile application and another Rs 23.02 crore in operations.
According to its annual financial report, the company raised Rs 652.66 crore through issue of preference shares in FY19. The company purchased financial securities worth Rs 1,705 crore during FY19 and earned Rs 9.88 crores as interest and another Rs 13.62 crores as gain on sale of these investments.
Due to the surge in expenses, Dream11’s net cash outflow from operations increased 4.3X to Rs 53.63 crore in FY19 from Rs 12.84 crore in FY18. Losses during the fiscal also ballooned 2X to Rs 131.64 crore in FY19 as compared to Rs 65.12 crore in FY18.
Interestingly, a 100% owned subsidiary of the company – “ Fiduciary Billing Services” – which manages the transactions and collections for the company managed to post a profit of Rs 1.46 crore in the same year.
During the fiscal ending March 2019, the company’s total assets stood at Rs 736.14 crore. It’s a 10.8X jump from Rs 68.12 crore in FY18 and 91.2% of theses assets were held as current financial assets by the company.
The gross value of related party transactions jumped 30.7X to Rs 46.04 crore in FY19 from only Rs 1.5 crore in FY18. Likewise, remuneration of co-founders – Harsh Jain and Bhavit Sheth and Chief Financial Officer Navin Agarwal – jumped 68.7X to Rs 42.6 crore in FY19 from only Rs 62.6 lakhs in FY18. This also includes ESOP allotted to them during the year as per ESOP scheme 2015.