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Intro Notes, Plugs & Amendments 🔌🔧

I was certain that once the Crypto markets crashed, demand for the Sporting Crypto newsletter would wane.

But this was not the case.

The crypto market halved — and Sporting Crypto has gone from zero to ~ 1800 subscribers.

And whilst demand for a consultancy from a volume perspective has reduced, the number of high-quality leads has exponentially increased.

Serious brands are scared of making moves when there is a lot of noise.

Now the noise has died down, they want to build something or experiment with Web3.

It's been a pleasure to connect and work with so many amazing people over the last year. So many of them, are brands I would never have dreamed of reaching out to me.

Speaking of big brands…

In today’s newsletter I discuss Sorare’s latest big sports league tie up; the NBA.

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This Week’s Deep Dive:  NBA Sign Multiyear Sorare Deal

The NBA, and NBPA (National Basketball Player’s Association) have signed a multi year deal with Sorare, to create the basketball league’s first NFT fantasy game.

Before we talk about the NBA’s ventures into Web3, let’s remind ourselves of just how well Sorare have done over the past three years.

Sorare, who started as an NFT Soccer fantasy game, have raised incredible sums of money including a $50m Series A which broke french tech records, followed by a $680m Series B raise led by none other than Softbank.

Those raises planted Sorare’s flag firmly on the map as not just one of the most successful crypto companies to come out of France, but one of the most successful tech companies to hail from the nation full stop.

Breaking down the numbers

In terms of volumes, Sorare had a little north of $2000 worth of sales in April 2019. 

In the month of January, 2020, they increased 25-fold to $50,000.

Fast forward to July 2020 — another 5-fold increase to $250,000.

January 2021 saw Sorare’s first 7-figure month at just over $2m worth of sales, another 4-fold increase.

August 2021 was their first 8-figure month, at ~ $15m. A figure that they have nearly already matched in September 2022 (currently at ~ $10m)

Sorare have done incredibly well to date. 

They’ve secured licenses in Soccer with the Bundesliga, La Liga, Serie A and the MLS — and onboarded Kylian Mbappe as an investor and ambassador.

They have a passionate userbase, with over 155,000 users owning a paid for, playable NFT.

Now that 155,000 number might not feel like a lot, but it’s a reasonably good indication of active users give or take 10s of thousands here and there.

Below is a graph taken from Soraredata, showing the number of cards owned by the Sorare userbase, each line indicating a different level of rarity.

Unlike Web2 tech players, this isn’t something Sorare can hide. We often see applications highlight ‘sign ups’ as an indicator of growth and success — when realistically the only thing that matters to almost any application is active users.

And those, Sorare have plenty of. 

Sorare claim they have two million registered users in 185 countries, of which about 20% are in the U.S.

A ~ 10% conversion to ‘owners’ of Sorare cards isn’t bad going.

The numbers are pretty strong.

Here are a few more from the 7th of September 2021 collated by Andrew:

There’s some nuance between owners and monthly users, but there have been close to 100k entrants to some gameweeks on the platform.

MLB and North American Expansion

Sorare announced the launch of their first ever new sport in the form of Baseball, earlier this year in May 2022. 

It was their first non-soccer launch and it did fairly well.

There was $1.5m worth of sales in a 24h period prior to the first ever MLB gameweek, from a total of 6000 buyers and 36,000 customers.

The MLB market, unless there’s huge volumes, will likely not bring in crazy figures for Sorare.

This is because unlike their soccer counterpart, the MLB fantasy game doesn’t have any cash prizes in the form of Ether (Ethereum’s cryptocurrency).

Citing stringent US regulation, Sorare chose to make the MLB game have only NFTs as prizes. Whether that changes as there’s more clarity on regulation, remains to be seen.

The cards sell for considerably less than their soccer counterparts, but the volumes are still encouraging for Sorare. Overall, they’ve done incredibly well globally — and their foray into the states has started well.

This has no doubt been on the radar for a while, with big-time hire Ryan Spoon, former BetMGM COO, brought in as Sorare COO in October 2021. 

It’s no shock to me they’ve made inroads so quickly into the US market. Not only because of Ryan and other US based hires, but because of their cap table, ambassadors and advisors .

Investors include the likes of Alexis Ohanian, who founded Reddit, now running 776 ventures, and Serena Williams - Ohanian’s partner - is on Sorare’s board.

While expansion in the US has happened quickly, it’s clear that this has been a strategic goal for Sorare, for a while.

NBA’s Web3 Story so far

NBA TopShot — the first killer mass market NFT usecase.

It exploded onto the scene and was one of the first NFT usecases that really captured the attention of non-crypto folk.

Tens of thousands were in digital queues for the Beta upon launch and volumes went pretty wild.

It used the familiar notion of collecting cards, but in a digital way, using video instead of static imagery.

If we look at the graph below, taken from Google Trends, we can see that TopShot was more searched than ‘NFTs’ in late 2020/early 2021.

That’s pretty wild.

This was *the* mainstreaming moment for NFTs. 

The NBA’s Web3 partnerships didn’t stop there, of course.

The NBA have partnered with Coinbase — and over 25 of the league’s franchises have partnered with fan token platform Socios.

Add these to the massive deals FTX has with the Miami Heat and Golden State warriors — there’s not a sport on earth that has had as many crypto tie ins either league wide, or franchise specific.

How well will this partnership go, and what now for TopShot?

The NFT market is waning, but Sorare’s volumes aren’t.

If we combine this with the fact that there is an avid audience of NBA digital collectable lovers due to the success of TopShot, this partnership is most likely going to be a success.

The NBA have actually taken an equity stake in Sorare, which is indicative of just how much conviction both parties have — but also just how long term they’re thinking here.

What does this mean for the Topshot? 

Well, these are two separate products, that much is true.

But it’s also true that Dapper were rumoured to be entering the fantasy game making TopShot moments Useable and functional in a game. That never came to be, and Sorare have taken advantage of that.

And if you’re the NBA, this makes sense.

There’s a ready made platform here that Sorare can alter for this new product, and let’s be honest, an equity deal is pretty sweet and aligns incentives for both parties.

But it does remain to be seen — that whilst this isn’t a direct competitor to TopShot, Sorare are going after the same audience (as well as offering it to their existing userbase) with the same wallets.

And whilst Dapper have a dedicated team working on TopShot, they’ve also partnered with the NFL, La Liga and other properties to create video collectable moments for them. The once crown jewel is no longer their sole focus, which is natural for a business like them.

There may also have been an acceptance that, whilst there’s demand for a fantasy product — Dapper has a large market share of another sector or the NFT market in moments.

And whilst Dapper have expanded the number of clients that they work with on this specific subset of NFTs, others have swooped in to either compete with them directly (offering up video moment NFTs) or take up the remaining pieces of the pie.

You can’t do everything all at once, and in fast growing tech markets, it’s natural to see divergence before some convergence when there’s less hype.

Sorare have netted (sorry) a great partnership here, and whilst it might not make a huge difference to their sales volumes in the short term it’s another indicator of just how serious they are about conquering the US market.

One of the premier NFT sports platforms on the globe just got bigger.

More sports crypto stories & things to put your radar

• Dez Bryant’s personal corner has partnered with Immutable. 

• Gianni Settino, the founder of Cryptostrikers, has raised $9m for his latest venture called HotStreak. One to keep an eye on — Gianni ships.

• The WBSC has signed a deal with LEVERADE to award the champions of the Baseball5 World Cup and the WBSC Virtual Cup digital trophies and medals as NFTs.

• Looks like LeBron James might have been given an RTKFT NFT, that has been personalised to his taste. An interesting discussion here about the immutability of NFTs.

• Sue Bird, WNBA star, advocating NFTs in Women in Sports. 

• I was surprised at just how many NBA TopShot moments have been minted to date. Pretty incredible stuff.

Great reads, great tweeting and more general ‘stuff’ that could impact you

• The most important moment in crypto history? Many would say so. Say goodbye to the entire crazy rhetoric around NFTs being bad for the environment.

• Nothing encompasses my frustration at seeing naysayers lump all NFTs into the same bucket more than this tweet. 

• Blizzard revoked a third-party purchase of an in-game asset. 

• Animoca brands have landed $110m in additional funding. They’ve invested in a variety of Sports x Web3 businesses.

Thank you!

Thanks for reading the latest edition of the Sporting Crypto newsletter. I’m really happy to see so many people enjoying it and sharing it with their networks. If you enjoyed this, please tell your friends who might be interested - and share it on social :)

This newsletter is for informational purposes only and is not financial or business advice.These are my thoughts & opinions and do not represent the opinions of any other person, business or entity.