Dream Sports, the parent company of Dream11, will not raise fresh capital from Chinese investors in the future, founder and CEO Harsh Jain said in an interview to the Economic Times. Chinese technology giant Tencent Holdings Ltd. owns less than 10% of Dream Sports, and has been diluting its stake in the company as India–China relations have intensified.
In August, Dream11 bagged sponsorship rights for the 2020 edition of Indian Premier League (IPL), after Chinese smartphone maker Vivo fell out of favour. Most recently, it raised US$225 million in a funding round with participation from Chrys Capital, Tiger Global Management, and others.
In India, Paytm, BigBasket, Zomato, PolicyBazaar, Swiggy, Udaan, and Byju’s have investors based in China, including Alibaba and Tencent. Koo, for instance, is in the final stags of closing an exit from Shunwei Capital from its parent firm, reported Times of India. Ant Group was considering selling off its 30% stake in One97 Communications in December given Indo-China relations, which both Ant Group and Paytm had refuted. Paytm’s Vijay Shekhar Sharma has defended the shareholding of Chinese investors in Paytm, declaring that shareholders “do not have a say” on what Paytm does.
Now, Indian startups which have raised funds from Chinese investors in the past are now looking for new investors which do not pose any geopolitical hurdle, reported the Times of India on Thursday. Startups are skirting away even from Chinese investors participating in a funding round, since any funds would have to be approved by the Indian government.
In August, Alibaba put its investments into Indian companies on hold for at least six months, while keeping existing stakes in Indian companies intact. The next month, in September, the Indian government revealed that foreign investment from China into telecom, electronics, computer software, etc., had shrunk by 64.5% between 2016 and 2020.
- FDI from China contracted by 64% between FY16 and FY20: Finance MoS in Lok Sabha
- Traders’ body calls for probe into Chinese investment in Flipkart, Paytm, Zomato and 138 other Indian start-ups