Dream11, 3 Other Startups off Unicorn List After Online Gaming Law: Report

As many as 4 startups, including Dream11 and Games24x7, have lost the coveted unicorn status after the government introduced a law to regulate the activities of real money gaming (RMG) companies, a report said on Thursday.

The other two RMG startups who are off the unicorn list are Gameskraft (30 million users) and Mobile Premier League (90 million). Dream11 has 260 million users while Games24x7 has 120 million, the report said.

Besides, the 'ASK Private Wealth Hurun India Unicorn and Future Unicorn Report 2025' said the valuations of popular 'Zupee' and 'Winzo Games', which were not unicorns, have also been impacted because of the law.

Unicorns are startups with a valuation of over $1 billion.

Last month, Parliament passed a bill to ban all forms of online money games and promote eSports and online social gaming. The law also prohibits advertisements related to online money games, as well as bars banks and financial institutions from facilitating or transferring funds for any of such games.

"These changes have hit the valuations of India's most prominent RMG companies," the report said, adding that these startups face limits on promotion which will slow down their growth, and tighten tax requirements.

The law has reduced investor confidence, the report said, adding that it may help the industry build trust and gain stability in the long run.

The RMG companies have resorted to a slew of measures including pulling off sponsorship of the Indian cricket team and also laid off huge chunk of their workforces after the government move.

Meanwhile, despite the drop in the RMG companies, the overall number of Indian startups in the unicorn list grew by six to 73 this year.

There were 11 new unicorns in the year, including Ai.tech, Navi Technologies, Vivriti Capital, Veritas Finance, Rapido, Netradyne, Jumbotail, DarwinBox, Moneyview, Juspay and Drools.

Discount brokerage Zerodha was the most valuable Indian startup at $ 8.2 billion followed by fintech Razorpay and eyecare focused Lenskart at $7.5 billion each.

Bengaluru leads as India's unicorn hub with 26 startups whose cumulative valuation stands at $70 billion, followed by Delhi-NCR with 12 worth $36.3 billion, and Mumbai with 11 worth $22.8 billion, the report said.

Kaivalya Vohra and Aadit Palicha, both 22-year-old, of Zepto stand as India's youngest unicorn founders, the report said.

The report, which details out startups valued at over $200 million, said such high valued startups employ 3.74 lakh people and the unicorns alone contribute 2.06 lakh people to it.

The report said venture capital firm Peak XV Partners dominates India's startup landscape, leading with 68 bets valued at over $200 million including Turtlemint, Whatfix, Groww and PRISM (OYO).

Amid concerns over the startups opting for revenue growth and discounting leading to cash burns, ASK Priavte Wealth's managing director and chief executive Rajesh Saluja said there is a growing focus on profitability, capital efficiency and sustainable business models among the partners.