Sporta Technologies, which owns the virtual gaming platform Dream11, has reported a widening in its losses for the financial year ended March 31,2019, as the company went aggressive on advertising and branding.
During the year, Dream11 spent Rs 785 crore on advertising, promotions and branding, higher by 3.5 times a year ago. This led to a similar spike in its total expenditure to Rs 935 crore. Advertising costs consisted of 85% of the total costs.
Other than advertising, the company’s employee costs expanded to Rs 66 crore from Rs 26 crore, IT costs doubled to Rs 41 crore, while other operational costs grew manifold to Rs 23 crore.
These costs overshadowed the company’s over threefold increase in revenue at Rs 775 crore, leading to a net loss of Rs 131 crore from Rs 65 crore.
The company is comfortable from a liquidity standpoint as its cash balance grew over 10 times to Rs 224 crore from Rs 22 crore.
Founded by Bhavit Sheth and Harsh Jain in 2007, Dream 11 allows users, which were at 50 million as of April 2019, to play fantasy games in cricket, football, kabaddi, and basketball. It is the official fantasy game partner of International Cricket Council, Indian Super League, Pro Kabaddi League, National Basketball Association and International Hockey Federation among others.
In April this year, Dream11 through a secondary share sale of $60 million to Hongkong-based Steadview Capital, become the first gaming company to be valued at $1 billion. Kalaari Capital, Think Investments and Multiples Alternate Asset Management sold a part of their investment.