Sporting Crypto - Sept 27th 2021 - Sorare Raise $680m and FTX Partner with Mercedes F1
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Intro Notes & Plugs 🔌
It feels like so much is going on right now that it’s really difficult to think through what the two or three biggest things happening in this space are. In fact, there’s more than enough content for 2 to 3 newsletters a week. Don’t worry though, I’m sticking to this because I wouldn’t want to bore you more than once a week.
I’m having more and more interesting conversations as a by-product of this newsletter. The reality of this is I’m quite shocked at just how much is going on under the hood. I’m having conversations right now about things that won’t really grace the limelight for another 12-18 months. This is really cool and I’m truly grateful for it.
A lot of people have asked me if it’s too late to explore this space, whether it be a brand or an individual. Right now, we’ve only just invented colour TV. That’s the metaphor I use in explaining how early this is. I think I’m just about too young to remember what the dial-up internet sound was like, but that’s basically where we are when it comes to Crypto, NFTs and tokens.
🔌 Over at Sorare Hub (one of the things I’ve co-founded with a couple of friends) we wrote a complete beginner’s guide to Sorare
🔌 This coming week, a podcast titled the ‘History and Future of NFTs’ should be dropping - produced end-to-end by yours truly! Keep your eyes and ears peeled :)
Stories & projects of the week
First of all, thanks Sorare for releasing this the day after the last newsletter went out!
If you haven’t tuned in to previous editions of this newsletter, Sorare is a global blockchain-based fantasy football game that utilises NFT technology. I like to explain it as Fifa Ultimate Team where you own the digital assets and instead of playing the game with your cards, you play a Fantasy style game.
Back in February 2021, Sorare raised $50m in a Series A that broke European and French records. The investors included Accel, Reddit’s Alexis Ohanian, Gary Vee, Antoine Griezmann and many more prominent names.
Since January 2021, Sorare has traded $150m worth of cards on the platform.
In January 2021, they traded around about $4m according to various statistical sources.
That’s quite the bump.
This gargantuan Series B was led by no other than SoftBank’s vision fund. They were joined by Atomico, Bessemer ventures, D1 Captial, Eurazeo, IVP and Liontree. Benchmark, Accel, Headline and various other existing backers also joined the round.
It’s one of the biggest in European history and the biggest Series B in French tech history, which is pretty incredible.
Sorare Co-Founder and CEO Nicolas said:
“We saw the immense potential that blockchain and NFTs brought to unlock a new way for football clubs, footballers, and their fans to experience a deeper connection with each other. We are thrilled by the success we have seen so far, but this is just the beginning. We believe this is a huge opportunity to create the next sports entertainment giant, bringing Sorare to more football fans and organisations, and to introduce the same proven model to other sports and sports fans worldwide,”
The rallying cry around ‘sports entertainment giant’ is something to keep in mind. This is much more than just a Fantasy NFT football game.
It’s a monster raise and many people will raise eyebrows at just how big this is. What is the actual potential here?
Between March 2020 and April 2021, Fifa Ultimate Team generated approximately $1.62bn dollars. That’s through selling cards that are only useable for one season, generate no yield if you’re good (or legally), are not actually owned by you and can’t be used outside of FIFA.
Considering these Sorare cards are not only collectables, but useable outside of the season they are licensed and minted - you can already see how that $1.62bn number might seem to start looking small in comparison to the potential here.
In 2017 there were ~60m people playing Fantasy Sports in the USA and Canada alone.
In the UK, home of Soccer - about 7-10m people sign up to play the Fantasy Premier League game per year. The issue here is that only about ~500k or so of people stay until the last game of the season. The sub 10% retention rate isn’t awful, but it’s not great either.
In 2020, eBay saw their trading cards category grow by 142% - selling 4 million MORE cards than they did in 2019.
Why am I referring to physical sports cards, FIFA Ultimate Team and Fantasy football as markets that have any relevance?
Because Sorare is disrupting them all, at a great pace. Their offering is exceptional and the reason for their success has simply been because they’re so all-encompassing as a product.
This is Fifa Ultimate team meets Sports trading cards meets Fantasy football.
That one-liner alone probably had investors jumping at the chance to invest at a lofty valuation.
The great thing about this is that those buckets that Sorare sits across are not restrictive in terms of their future potential. Sorare has already started to bridge the physical with the digital, recently giving 200 La Liga tickets away to winners of one of their fantasy games. And there’s so much here that could happen when the space matures.
Imagine a world where you can use your Sorare card to access physical and digital events.
A world where you can use it in other games and game modes, further than Fantasy Football.
The reality is that Sorare’s potential is as boundless as the creativity of the ecosystem that surrounds it.
FTX, the fastest growing Crypto exchange in this space have signed a partnership with Mercedes F1.
If you don't know who FTX are, they closed a 900m Series B in the Largest Crypto Exchange raise of all time which included funding from SoftBank, Sequoia and Coinbase.
They’ve been aggressively targeting the sports market; Partnerships with the MLB All-Star-Game, Steph Curry, Tom Brady and E-Sports institutions are examples of just how vast their influence is in a Sporting sense.
Let’s summarise the partnership with Mercedes in a few lines:
The branding is set to be unveiled at the Russian Grand Prix
FTX and Mercedes are going to release joint initiatives in the NFT space
FTX are no stranger to spending huge sums on deals like this. They recently signed naming rights of Miami Heat’s arena for a cool $135m for example. It comes to no one’s surprise that they are now going after one of the most affluent sports in the world.
When I was first announced as COPA90’s Head of Crypto Media I was asked by a lot of outlets about what my thoughts were regarding Crypto sponsorships within football. We’ve seen Sportsbet, Dogecoin and more in this space - and my crude answer was that Football clubs have lost a lot of revenue through the pandemic, and gambling sponsors are going to become less prevalent.
The reality is, that’s exactly what some of these partnerships will be; supplementing franchise revenue that might have been lost otherwise.
There is something more with specific partners, however.
For the likes of Crypto.com and FTX, who have been spending vast sums in a sporting sponsorship sense - this is strategic just as much as it is marketing.
FTX and Crypto.com essentially have the toolkits and insight to help brands do anything they want in the Crypto world.
Mercedes want to create their own NFTs? You can guess who they’ll go to
Mercedes want to launch their own blockchain and token? You can guess who they’ll go to
Mercedes want to create a tokenised fan community on Discord? You can guess who they’ll go to
Some of these ideas might seem out there, but this is the world we’re heading toward.
FTX here has positioned itself very cleverly inside a behemoth of F1.
This isn’t just about sponsoring a brand, it’s about strategically positioning yourself as a helping hand into the world of Crypto whenever said brand is ready to make the leap.
Some of these sponsorships will remain as such, name on social content and advertisement banners.
But some Crypto companies are going for much more than that.
That’s where I think this becomes interesting.
Dogecoin being Watford sponsors was the Alpha and doesn’t have much more to it than what meets the eye.
The partnerships and sponsorship deals we see in the future are going to be a lot deeper, especially as the Metaverse starts taking shape.
Crypto Deep Dive: Twitter to add Bitcoin tipping & NFT Verification
I think we’ll look back on this as being a defining moment for this space.
The bridges between Web2.0 and Web3.0 aren’t Google, Apple or Microsoft (eventually, they’ll create them).
It’s Discord and Twitter.
NFTs are everything, but one of the things they definitely are is social status.
This is Supreme, Dior and Versace but digitally speaking.
As Simon says below, they are destined to become Web3’s answer to the blue checkmark…but with cryptographic proof.
This is the natural evolution in the way we interact as humans.
A natural evolution in the way we communicate.
Some see it now, some will see it in 12 months or 36 months time. There’s an air of inevitability when it comes to NFTs.
There are just so many use cases that them becoming a mainstay of our day to day lives is basically certain.
With this specific bit of news we’re essentially taking Social status, creating a digital version of it which is secured by a blockchain - that is also tradeable on a secondary market where royalties actually end up with the people that created the artwork.
This is basically Soho House meets Supreme meets Social Media, but tradeable and secured by cryptography.
If you’re working on NFT strategies internally at a Sports company - get down to the basics. NFTs are a big part of our evolution as humans in a digital sense. Start there.
Gary Vee isn’t everyone’s cup of tea.
But he’s right here.
You can’t see someone’s social status.
The Aha moment is when marketers and brands realise that this new world is less opaque than the physical one we’re used to playing in.
More big stories & things to put on your radar
NBA Top Shot creator Dapper Labs raises another $250m
Another big one, $7.6bn valuation. Would have definitely made it into the main section if they were a Sports only company!
How not to do NFTs by NBAs John Wall…
TL/DR here - John Wall, NBA star, created NFTs that was just a complete rip off of some Fortnite art. This was super strange because John Wall has a lot of money, so I’m unsure who of his team have decided to do this so, so sloppily.
How not to do Crypto partnerships in Sports by Southampton FC
Some sports franchises and clubs are 100% rushing into this space. Some of them, completely blind. As with anything nascent, there are bad actors or those that act in the grey. Brands have a responsibility to do proper due diligence.This is bonkers. A pro-crypto "education site" dedicated to debunking criticisms" of cryptocurrency. No disclaimers. (The Financial Conduct Authority says "if you invest in cryptoassets, you should be prepared to lose all your money.)🤝 #SaintsFC is delighted to announce https://t.co/azBaacbCCV as the club's Official Training Kit Partner:Southampton FC @SouthamptonFC
Dapper Labs officially unveiled their partnership with La Liga last week
Sorare launch legends on their platform including
PSV, the dutch football giant, have revealed they are holding Bitcoin on their balance sheet
Great reads and great tweeting
If you’re remotely interested in Web 3, this tweet storm by Chris Dixon is just unreal. Own a piece of the internet.
China banned Bitcoin again, lol
A really awesome thread about frozen digital assets. We’re going to live in a far more liquid internet in the future.
Nice map of how NFTs are currently being used
Thanks for reading my first ever Sporting Crypto newsletter! If you enjoyed it, please tell your friends who might be interested - and share it on social :)