$700 million in Fantasy Football and How Sorare is leveraging NFT to help grow?

Oddup Team
November 8, 2021

The global business of fantasy sports was valued at $18.9 billion in 2019. It is expected to reach the level of $46.8 billion by 2027. Fantasy football is a lucrative market especially in cash rich EU markets and major fan following in Latin America and Asia, where users play by drafting their favorite international football players, prepare a lineup for them, and get points by beating their friends in a friendly match. 

This simple model was transformed by Sorare in 2018 when the Paris-based company introduced the ability to not only own a simple football player card but an original digital card registered a non-fungible token on the Ethereum blockchain. These NFT-based cards on the platform can be bought, added to a collection, and freely sold as crypto-collectibles.

“When my co-founder and I first laid out our vision for Sorare in the summer of 2018, our ambition was to create a new game that could unlock the limitless potential of non-fungible technology.”- Nicolas Julia, co-founder, and CEO of Sorare.

The growing demand and popularity of NFT tokens are driving people to take the Sorare fantasy football platform seriously. Whether you are a football fanatic or an average NFT collector, the Sorare platform is offering a unique football experience where people play with officially licensed football crypto collectibles.

Nicolas Julia, Adrien Montfort, and their visionary game with digital football collectibles

Nicolas Julia in his early days could have never predicted that the world could be driven so efficiently by assets that do not physically exist. He is an alumnus of the Hanken School of Economics and EM Lyon Business School. Julia completed an MSc in Economics (from Hanken in 2009) and another MSc in Management (from EM Lyon in 2020). After finishing his academic endeavors, blockchain technology raised curiosity and interest in Julia’s mind. 

Before co-founding Sorare, Julia became one of the first team members of Stratumn SAS, a blockchain-powered network solutions provider for enhanced traceability and security of processes between enterprises and their stakeholders. Nicolas Julia was the VP of operations at Stratumn which raised $8 million to fund expansion into the US, the largest market for blockchain-centric companies. 

At Stratumn, Nicolas Julia scaled operations after the $8 million funding round and sealed many six-figure deals. Adrien Montfort, who later joined Nicolas in establishing Sorare, was a close colleague. Before joining Sorare, Montfort was the VP of Engineering at Stratumn for more than 10 years. He was responsible for creating and managing Stratumn’s uniquely efficient blockchain engineering team.

It took just a few years for Julia to embrace his entrepreneurial tendencies which ended up being the reason for Sorare’s foundation. Julia has stated quite a few times during interviews that he always wanted to create something that would combine entertainment and blockchain technology. But the idea of creating a game within a game struck him when he shared his passion for football and blockchain tech with Adrien Montfort who then proposed to join the two and create Sorare. Montfort is now the co-founder and chief technology officer at Sorare. 

2018, the year when Sorare came into existence was the worst ever for Bitcoin and the cryptocurrency market in general. It was the time when the crypto bubble seemed to have popped and the entire crypto market collapsed by 80% by September 2017. The situation was even worse than the dot-com bubble collapse but things went way worse due to a noticeable fall in mining revenue. 

As mining and trading seemed no longer a profitable activity for crypto holders, people went all into decentralized applications (DApps) and NFT collectibles to secure the value of their assets. NFT has recorded a significant increase in trading and demand in the past. The NFT market jumped from $41 million in 2018 to $338 million in a matter of two years. This year the total sales in the NFT market are valued at $2.5 billion, according to Non-fungible Corp.

The summer of that year was a decisive one for both the co-founders of the Sorare platform. They decided to build a DApp, a game which would feature one of the most passionately followed sports: Football. The plan was to create a football game for the football fans by football fans and include digital collectibles that would be both useful and valuable for players in the long run. The two wanted to work on a fantasy football game by harnessing the untapped potential of NFT and blockchain technology.

That is how Sorare, a DApp game that is both fun and rewarding for players came into being.

“When we first discussed building a decentralized application with my co-founder Nicolas, our shared goal was to build a mainstream product.”- Adrien Montfort, co-founder, and CTO of Sorare.

How Does Sorare Work?

Though Sorare seems like just a new kind of fantasy football game based on blockchain technology, the inclusion of NFTs makes it valuable. Players get to buy digital trading cards featuring their favorite players. These cards are fully licensed and available through an auction held on the Sorare platform. Once bought, players take the sole ownership of these NFT collectible cards. 

One could describe Sorare as a combination of traditional fantasy football with an NFT twist. Players are put in different leagues based on the in-game points received by their favorite professional football player. The Player’s goal is to beat others belonging to the same league by collecting the most points. The scoreboard changes every single week.

More than 100 famous international teams across various football leagues are available on Sorare. As a player, you could get your hands on any trading card after purchasing it from the main marketplace.  Leagues like Juventus, AC Milan, Liverpool FC, Paris Saint-Germain FC, Real Madrid, and all of the Japanese J. leagues and Spanish LaLiga and each player associated with these clubs are available in Sorare.

The way Sorare works is simple. The game has different leagues and players are supposed to sign up for any one of them. There is also a rookie league for a newcomer looking for lineups with young players no more than 23 years of age. 

Joining the league allows you to set a lineup every play week after which the in-game points are counted and tallied with other players within the same league based on the real-world performance of the chosen football players. 

Those who manage to get the highest points to win ETH rewards and rare cards. Up until now, the most valuable card by Sorare was Cristiano Ronaldo which came out as the unique card of 2020-2021. It was sold for nearly $290,000 in March this year.

“When you translate it to NFTs in the digital world, there are many more things which you can do, like using them in a game for instance. But you also have provable scarcity, which is very appealing to collectors.”-  Sorare’s co-founder and CEO.

What’s So Special about it?

Many characteristics make Sorare, one of a kind fantasy football game. Like other crypto-centric online games, Sorare is free to play. All one has to do is sign up on the website and follow the tutorial to unlock 12 free cards of “Common” players. But these cards hold no value for buying or selling whatsoever. But it can be used in lineups just like the other cards.

Sorare has a direct competitor in NBA Top Shot which is another series of collectible trading cards in the form of NFTs. But the main difference between these two is that there is no real-gaming experience in NBA Top Shot. On the other hand, Sorare gives players a chance to play using their favorite international football stars. Sorare also has a reward system and the ability to resell the cards that a player owns. 

“When we think about the collectibles in the physical world, most of them have no utility value,” Nicolas Julia, CEO, and cop-founder of Sorare, explained. “You put them in an album and that’s nice but it’s kind of limiting.”

Sports-focused NFT platforms are in the middle of a gold rush this year and Sorare is positioned excellently to profit from the demand and growth of fantasy football experience.

Competitors, Market Growth, Investors, and Partners

The new ERC-721 non-fungible token standard made it possible for decentralized applications like Sorare to explode in popularity. The invention of this particular token standard for Ethereum blockchain-based tokens was meant to improve the interface incapability encountered in the ERC-20 token standard. 

The next year, crypto markets saw sports league adoption specifically in the NBA and NFL. In the same year, Sorare received early traction by selling €1 million worth of NFT-based football trading cards to jumpstart their platform. The DApp industry reached $14.2 billion in total market capitalization in August 2021. This means Sorare can operate at the intersection of the NFT market and fantasy gaming powered by blockchain tech.

In terms of investments, Sorare has received some of the leading companies’ support,and funds since its inception. The company made headlines way earlier during its pre-seed funding round which was led by Seedcamp and Kima Ventures. The seed round saw the participation of up to 10 investors out of which 7 were partner investors namely, Partech, Headline, MPGI, Fabric Ventures, etc. 

During this time, Sorare observed record sales of its officially licensed player cards. Between December 2019 to June 2020, the company received requests from more than 70 European and Asian football clubs to issue their official cards on the platform. Through the funds raised in Seed round, Sorare nearly doubled its team size and football clubs under license.

Sorare’s series A funding round has been one of the most important ones because it introduced Julia and Montfort’s brainchild to financial conglomerates like Accel, Benchmark, some angel investors like Reddit co-founder, and even football players like Griezmann and Rio Ferdinand. 

The first partner that Sorare signed was Pro League which is the professional Belgian football league. Now the company has managed to collaborate with over 180 football organizations and renowned football clubs of Europe like Real Madrid, Liverpool, and Juventus. Sorare exhibits advancements in all respects as the transaction volume and the total number of active users keep rising. 

According to a recent stats check, Sorare currently has over 600,000 registered users out of which up to 150,000 players partake in buying/selling digital trading cards each month. Since January, $150 million worth of cards has been traded on the platform. Sales increased by 50 times within a year since Q2 2020 and monthly active users increased by 34 times within Q2 2020 and Q2 2021.

The closest match for Sorare has to be Dapper Labs’ NBA Top Shot. It is a $683 million marketplace for passionate basketball fans who trade and collect video highlights called “moments” from memorable basketball matches. The digital startup behind NBA Top Shot is also the creator of one of the top digital pet games called CryptoKitties. 

DapperLabs has also partnered with LaLiga just like Sorare and is currently working on a similar experience with Spain’s top soccer league. It is a matter of who can take the most advantage of sports stars' huge social media following to spark interest in new users.

Other competitors include Rally, a fractionalized collective investments company that launched in 2017. It has received backing from Accel. Mythical Games is also a strong contender which is an NFT startup. It successfully raised $75 million during its Series B funding round which was led by WestCap.

$738.4 Million and 4 Funding Rounds

Funding-wise, Sorare has been favored by several industry leaders. This is why since its inception, this company has completed four funding rounds to date. The benchmark valuation of Sorare has reached $5 billion by September 27th.

The total funds raised by Sorare is north of $738 million with Cathay Innovation being the lead investor overall. 33 investors, venture capitalists, angel investors, and companies have participated in Sorare’s funding rounds. Per the analysis performed by Oddup to represent the overall health of an organization like Sorare, has acquired a score of 85.83. A detailed overview of all the past funding rounds completed by Sorare is as follows;

Pre-Seed - $644,650

The pre-seed round occurred in May of 2019 with the participation of 5 inventors that resulted in $644,650 as total funds. Kima Ventures, Seedcamp, and ConsenSys Ventures were some of the leading investors. The financing received from this round led the company to hire new and talented designers and engineers to develop and perfect their game.

“At Seedcamp, we’ve been closely following the fast growth of the virtual goods economy as testified by the craze around Fortnite Skins or FIFA Ultimate Team cards,” said Sia Houchangnia, Partner at Seedcamp. “We also believe that gaming will be one of the main drivers behind mainstream crypto adoption and are delighted to have found with Sorare an exceptional team-building what we think will be the first mass crypto game.”

Seed - $10 Million

The seed round of Sorare turned out to be more profitable for the company than the pre-seed round as the number of participants doubled and this time many well-known names within the industry backed Sorare. This round was announced back in July 2020 and raised almost $10 million from lead investor Headline, a global venture capital firm. Other investors who joined Headline were Semantic Ventures, Presight Capital, MPGI, Cygni Capital, etc. Sorare recorded massive growth on its platform as 120 football clubs released their digital cards on Sorare. Closing its seed round led Sorare into the group of culturally influential companies and innovative brands.

Gerard Piqué, Strategic Advisor at Sorare, commented ‘‘Nicolas and the team have a unique gaming experience with real-world impact, bringing fantasy to reality. I’m looking forward to helping the team and the Sorare community connect with more football clubs and leagues.”

Series A - $46.9 Million

Benchmark Venture Capital firm recorded its interest and secured financial backing for Sorare during its series A funding round which was held in February this year. Benchmark put Sorare in the same category as other giants like Twitter, Snapchat, and Instagram. Fabric ventures also doubled their investment in Sorare in this round. A total of $50 million was raised with the participation of 7 influential inventors.

Peter Fenton, General Partner at Benchmark commented: “We’re thrilled to partner with Sorare as their lead Series A investor. The company combines the global passion for football collectibles with the excitement of real-world play in fantasy league tournaments.

Series B - $679.5 Million

The most recent and most successful round of financing for Sorare has been its series B round which garnered about $680 million. The leading investor this time around was none other than SoftBank vision fund 2. It is not the first time the conglomerate has financially backed a cryptocurrency startup. Previously, SoftBank vision fund 2 funded Mercado Bitcoin and Peter Thiel’s Bullish. According to the reports, Marcelo Claure, CEO of SoftBank Group International and COO of the SoftBank Group has also joined the board of Sorare. Upon closing the series B round, Sorare’s valuation peaked at $4.3 billion.

“I’ve personally joined the board,” he told Forbes in an exclusive interview, “which is something that I try not to do, but I'm just so motivated by Sorare’s potential and what it’s trying to build.”- Marcelo Claure CEO of SoftBank Group International

Future of Sorare

Before turning into an entrepreneur, Julia was a devoted football fan. He recalls the world cup of 1998 hosted by France which left him in awe of the game for the rest of his life. His first sticker album included Zidane, Ronaldo, and Bierhoff. It was this passion that gave meaning to his dream of combining football and blockchain gaming. 

The vision behind Sorare is to become the go-to platform for global football lovers to enjoy live football. The digital scarcity is revolutionary and Sorare intends to utilize it appropriately for football fans, collectors who would need a reliable marketplace for trading and connecting with like-minded people. The funds would help Sorare to create a world-class team, onboard several international football leagues, and launch a mobile application by the end of 2022.

“I don’t believe that blockchains have a scaling problem, I am convinced that their issue has to do with user adoption.” -Nicolas Julia, CEO of Sorare

Recently, Sorare announced that 50 additional football legends are going to be included in the game after they have signed an exclusive NFT deal. The legends would include Iker Casillas, Javier Zanetti, Ronaldo Nazário, Fabio Cannavaro, and even Diego Maradona. These upcoming cards would also have utility and immense potential to aid players in winning.

“Through Sorare, we have harnessed the potential of a technology that is transforming the gaming industry.”-Nicolas Julia, CEO of Sorare

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