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Digital collectibles are taking sports by storm, and since the sports industry evolves so quickly, I say it’s a good idea to understand them fully.
Over the next couple of weeks, we’ll learn about a few players in the digital collectibles space in sports, their value propositions, business models, and more.
Today we’ll talk about the French unicorn ‘Sorare.’
Sorare is a fantasy football game where players buy, sell, trade, and manage a virtual team with digital player cards.
The game uses blockchain technology and is based on the Ethereum platform to secure the ownership and distribution of digital cards. The supply of cards is limited, and cards cannot be altered, duplicated, or deleted.
They recently scored a Series B investment round of 680 million USD at a valuation of 4.3 billion USD led by SoftBank and supported by famous soccer players like Gerard Pique, Antoine Griezmann, Rio Ferdinand, and Cesar Azpilicueta.
Users have traded +150 million USD worth of cards on the platform. It has more than 600,000 registered users and about 150,000 monthly active users.
Here’s how the founders presented Sorare to investors (back when they were raising their seed round):
People love to collect goods
We [humans] cannot collect digital goods
People with no technical background might find crypto-assets quite complex and may experience difficulty owning and engaging with them.
However, Sorare allows you to buy a crypto asset that you can relate to personally (i.e., a football player) in just three clicks.
“We designed a mainstream game and marketplace for soccer fans in the Ethereum blockchain with official licenses for players to collect, trade, and play with each other”
A simple yet brilliant idea worth +4 billion USD!
Sorare’s Business Model
Sorare generates revenue by issuing new cards on the platform and selling them online to people in the network.
You can then buy those new cards and add them to your collection.
Now here’s where it gets fascinating:
Have you ever played fantasy sports?
In fantasy sports, you earn points based on the performance of players in real life.
Well, these guys made Sorare LIKE a fantasy sport — you can manage a squad of players and earn points based on real-life performances.
The crazy part?
Excellent performance on the pitch from ‘your player’ can increase the value of your collectible – which you can sell later on for a profit.
It’s a new investment vehicle. Mind = blown! 🤯
The Bottom Line
You may be thinking – so is Sorare like another gambling platform?
Well, not really.
The space is relatively new, has almost no precedent, and could even be hard to define.
Meaning, they’ll most likely run into tons of obstacles for adoption in the future due to the lack of regulation surrounding crypto.
Nevertheless, Sorare is killing it so far, and the benefits for every stakeholder are crystal clear:
Sorare is a tool that generates fan engagement, gives them an alternative source of revenues, and creates a new marketing channel for their brands and players.
We can now acquire scarce digital assets that can be used with a purpose (gaming), be part of a community of like-minded individuals, and access an alternative investment vehicle.
🎙 Halftime Snack of the Week
This week’s episode of The Halftime Snacks features Melinda Travis – a sports industry veteran with experience on both sides of the media equation.
Melinda is the CEO & founder of Mile 44 – a company pushing the boundaries of creativity by developing high-end quality content for global sports brands.
Our conversation featured discussions around sports marketing and media, the role of sports in culture, challenges of working with brands and athletes, Mile 44, the value of diversity, and so much more!
📊 Iker Casillas launches Sportboost – The New Startup Accelerator in Sports; This accelerator/incubator for sports-related startups aims to turn them into leading companies in their sector. Check it out!
🎮 EA Sports Is Planning for a FIFA Without FIFA; FIFA wants to limit EA’s exclusivity to seek new revenue streams for the rights it would retain. EA Sports wants to explore other ventures, including highlights of actual games, arena video game tournaments, and digital products like NFTs.
From the Vault
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Until next week,
Read more: sportstechbiz.substack.com.
Halftime Snacks Podcast