Dream11 books Rs 181 Cr profit with Rs 2000+ Cr revenue in FY19-20

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Dream11, the fantasy sports leader, reported a record profit of Rs 181 crore for the financial year 2019-20 up from a loss of Rs 87.8 crore in the previous year, according to its regulatory filings as first reported by Entrackr. The revenue shot up to Rs 2070 crore up from Rs 775.5 crore in the previous year i.e., 2.67x growth YoY. It is noteworthy that Dream11 had a negative operating cash flow of  Rs 57.4 crore during FY18-19 which turned into positive cash inflows of nearly Rs 261 crore during FY19-20.

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Splurge on promotions and advertising

The Mumbai-based company had spent amounts aggressively towards advertising. It is noteworthy that Dream11 was the sponsor of the IPL 2020 edition (the sponsorship expenses will be accounted for in FY20-21). The fantasy platform relies heavily on advertising across media platforms to attract downloads on its app solely through APKs or Android Application Package. The app is not available on the Playstore.

Advertising and promotional expenses made up for 71.1% of the annual expenses with a YoY increase by 69.20% to Rs 1328.02 crore during FY20 from Rs 785.1 crore in FY19. Sponsorship costs reportedly went down by 39% to Rs 100.7 crore during FY19-20.

Expanding Employee base

Dream11 had to expand its employee base to keep up with the growth and maybe to retain talent in a crowded market. The employee benefit expenses grew by 133.6% to Rs 153.21 crore during FY20. The upward trajectory of Dream11 is also reflected in the transaction processing fees paid out by the company which increased to Rs 40.12 crore during FY19-20 up from Rs 19.41 crore in the previous FY.

Expenditure On Information Technology

Expenditure on information technology made up 12.3% of the company’s annual costs. These expenses ballooned up 5.7X to Rs 230.5 crore during FY20 from Rs 40.5 crore. Dream Sports had recently launched Dream Capital, a $250 million corporate venture capital fund to further its investments in sports, online gaming, and fitness-tech startups. The company has also made an investment in Elevar, a D2C sports brand.

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Dream11 Sports Foundation

Dream Sports Foundation” a philanthropic arm of Dream Sports was recently launched with an aim to support sportspersons through an array of initiatives: Dream11‘s expenditure on donations grew 16.8X to Rs 9.6 crore in FY19, most of which was routed through Dream Sports Foundation. During the pandemic, Dream11 has also claimed to have supported more than 6 lakh Indians through its various relief initiatives. The foundation helped 16 NGOs across the country, including Nav Sahyog Foundation, Dribble Academy, Nagaland Football Foundation, The Right Pitch, The Ball Project, etc.

Other miscellaneous expenses of Rs 77.8 crore pushed total costs incurred by Dream11 during FY19-20 to Rs 1867.60, which grew by around 99% from Rs 934.4 crore spent in total during FY18-19. All in all, Dream11 spent Rs 0.9 to earn a single rupee of operating revenue, improving from Rs 1.2 spent to earn the same during FY18-19.