With 13 crore users, India boasts of being the world’s largest fantasy sports market. According to a report by Deloitte, the Indian fantasy sports market is valued at Rs 34,600 crore and is estimated to grow Rs 1,65,000 crore by 2025 at a CAGR of 38%. With the Indian Premier League (IPL) round the corner, it seems to be a profitable marketing playground for fantasy sports platforms to bet on the popularity of the tournament. One such fantasy sports platform, Sportiqo has joined the league to bank on the popularity of IPL 2023.
The blockchain-based fantasy cricket platform has raised Rs 10 crore in the pre-seed round from angel investors with a focus on user acquisition in its first phase post launch. It aims to raise eight to ten million dollars in the next three-six months. The platform is already live for the International T20 League, and plans on to triple its user base with its IPL launch on April 4, 2023. In a conversation with Brandwagon Online, Anindya Kar, co-founder and chief product officer, Sportiqo, talks about the company’s revenue model, expansion plans and more. (Edited Excerpts)
How does the platform work?
We are trying to build a virtual stock market for sports with the platform, essentially enabling the trading of player performance. Basically, it is kind of a linear profile using the fantasy sport point system mechanism.
The unique selling point of this platform is its performance ranking system based on an algorithm that analyses a variety of batting, bowling and fielding statistics to assign an index rating to each player. On Sportiqo, when a fan selects a player, she is rewarded cash ‘dividends’ based on their portfolio. This way the platform enables one to pick and choose top players, basis their knowledge and analysis of the sport.
In India, blockchain is considered to be a development. So, how has your company’s business model sustained itself and what are its future plans?
I believe we are using blockchain as a tool to ensure transparency and trust. While our individual player stocks are ERC-20 tokens, the purpose is to ensure that anybody can verify whatever transactions are going on. The company’s blockchain doesn’t aim to enable transactions such as non-fungible tokens (NFTs) or crypto. We have been using blockchain to ensure that users can see what is going on in the platform. I think blockchain is not a challenge for us when it comes to India, as it doesn’t intend to affect user experience.
While blockchain gaming market is believed to be at a nascent stage, it’s expected to see an upward trend in upcoming years. In the current context, how’s your company generating revenue?
We are a virtual trading platform which simulates the stock market. Whenever a transaction happens concerning player stocks, there’s a one percent commission on buying side and two percent commission on selling side. It doesn’t depend on the underlying blockchain or gas fee. In terms of blockchain gaming, our revenue model is in the intersection of sports and blockchain. Although, we haven’t directly entered the space of NFTs in the context of fantasy football.
How do you counter costs associated with maintaining the blockchain? Does it get added to users’ fee for buying player stocks?
Our business model’s supporting blockchain is Polygon, which helps in minimising the concerned gas fees. Costs related to gas fees get absorbed by the platform. We have also explored other ways of reducing gas fees such as clubbing transactions. As our business model is based on encouraging more and more transactions and the commission that we charge helps to cover the gas fees.
What is the cost of customer acquisition on the platform? What is the monthly burn?
We have 35,000 registered users since the launch in India and we spend primarily between Rs. 25-30 per customer acquisition on the platform. The monthly burn is roughly around one lakh dollar around customer acquisition and technology.
With India already a cluttered market for large fantasy sports firms, how do you plan to counterpart your competitors in this market?
Audience engagement in India is unique to cricket. Transforming this fandom into a stock markets format is a unique proposition that we offer. When we launched Sportiqo, we were looking for an interactive and entertaining way to engage people while also making it informative so that they get a basic idea of the world of investing and trading. The platform is powered by blockchain technology and deep analytics giving each player a unique value basis several parameters.
Moreover, the platform has been developed to be intuitive and user-friendly. The price is determined by expectations of the players’ future performance in the market. The fluctuation in players’ prices depends on the changes in his/her dynamic performance. The player stocks known as ‘counters’ on Sportiqo and the ‘dividend’ rewards are denominated in SPQ, Sportiqo’s in-app currency.
So, it is a very different skill based exercise which is a far more intelligent game than a simple contest. Our positioning is very different, we want to bring the thrill of trading and investing combined with cricket. However, we don’t want to compete directly with any of the big established players in the market. The early adopters will be niche as it is a different product. So, we want to create that space of fantasy sports trading and are optimistic that users will come and explore it.
With IPL being round the corner, how do you plan to make the most of it in terms of revenue?
IPL being the biggest T20 Cricket tournament in the world. We plan to launch a full-fledged version on April 4, 2023 during IPL. Based on a beta launch, we are targeting to triple our user base during the tournament. We aim to raise the figure to over 5 million active users by 2027.
What are your marketing plans in terms of investment?
We plan to invest heavily in marketing with 25 percent of our investment allocated to marketing activities which sums up to Rs. 2.5 crore. Out of this, 60% is allocated to influencer marketing.
In terms of blockchain gaming prospects, do you plan to stick with cricket or go beyond it?
I believe our expansion strategy is two fold in India. Right now, we only work with Twenty20 (T20) cricket but plan to add One Day International format before World Cup. We are also working with trading of teams, and plan to introduce other sports such as soccer and kabaddi in India. Furthermore, we are exploring the North American sports market through National Football League (NFL), National Basketball Association (NBA), among others.
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