Sorare, a fantasy sports and non-fungible token (NFT) trading platform valued last year at $4.3 billion, has signed a partnership with Major League Baseball and the Major League Baseball Players Association.
It is Sorare’s second deal with a U.S. sports league this year as the startup until recently had primarily focused on European soccer, where the company is a major player with official licenses with more than 250 clubs. In March, Sorare announced a deal with Major League Soccer, its entry into the U.S. market.
Sorare has a marketplace where people can buy and sell NFTs as well as a fantasy game where they can trade and manage teams.
Terms of the MLB/MLBPA deal were not disclosed. But MLB received an equity stake in Sorare as part of its investment, according to Noah Garden, the league’s chief revenue officer. MLB and Sorare are planning on launching the fantasy game and NFT platform this summer.
“Sorare, when they first came to us, they had a different take on (NFTs),” Garden said. “We’re always looking at different ways to reach a younger audience and our younger fan base.”
He added: “The goal has always been to find a new way of fantasy for folks that love the game or are casually involved in the game but don’t have to spend three hours a day to win their fantasy baseball league.”
Garden said that MLB has taken equity in other companies it has partnered with in recent years, including last year when it signed separate NFT deals with Topps and Candy Digital, a digital collectibles company that Fanatics chairman Michael Rubin founded.
“When we’re going to invest, we lean into all our partnerships,” Garden said. “We want to partner with people that are going to be very successful. We want to lean in and help them be successful. I’ve always found when there’s skin in the game on both sides, that puts us in a position to really work hard together to create the best product you can for the fans. If you do that, the money always comes.”
Sorare was founded in 2018 by Nicolas Julia and Adrien Montfort, who worked together at Stratumn, a Paris-based financial technology company with a platform for developing blockchain applications. Julia and Montfort had each been involved in cryptocurrencies for several years, but they left Stratumn after becoming more familiar with NFTs.
“We were like, ‘This is going to be the vehicle for mainstream adoption of crypto and digital assets because you have this emotional connections with NFTs that you don’t have with bitcoin or cryptocurrencies in general,’” said Julia, who is Sorare’s chief executive. “You are tapping into something that is passion and bringing people together. That was very, very appealing to us.”
As cryptocurrencies and NFTs exploded during the coronavirus pandemic, Sorare caught the attention of the investment community, which was attracted to Sorare’s success doing deals with major European soccer clubs. Sorare raised $50 million in a Series A round in February 2021 and $680 million in a Series B round in September 2021 that valued the company at a $4.3 billion valuation, That was Europe’s largest Series B round and the second-largest private fundraise among blockchain startups, only trailing cryptocurrency exchange FTX.
Japanese conglomerate SoftBank led the Series B round. The company’s other investors include venture capital firms such as Benchmark, D1 Capital, Bessemer Ventures and Seven Seven Six, which is led by Alexis Ohanian, the co-founder of Reddit.
Ohanian invested in both the Series A and B rounds and was drawn to Sorare’s vision of expanding beyond soccer and into the major U.S. leagues. Tennis star Serena Williams, Ohanian’s wife, also joined Sorare’s board this year as a board advisor.
“Crypto is truly international and soccer is the most popular sport in the world, so even if they stayed in (soccer), they still could have been a wildly successful business,” Ohanian said. “But once you have the core infrastructure built, adding another sport is, I don’t want to say trivial, but it’s quite doable. You have to think through some things a little differently because the nature of the games vary. But once we saw the appetite from other leagues, now it’s just knocking down the other sports than fans love.”
Sorare had $325 million in trading volume last year, according to Julia, and it expects to achieve at least $700 million in volume this year. The company claims to have 1.8 million registered users in 185 countries, with nearly 20% of users residing in the U.S.
Sorare currently has about 70 employees split between Paris and the United States. The company opened an office in New York last year and has made some big-name hires, including bringing aboard Ryan Spoon as chief operating officer, Michael Meltzer as head of business development and Dan Sormaz as head of design. Spoon was previously chief operating officer at BetMGM and senior vice president of digital and social content at ESPN, while Meltzer was senior director of strategic ventures at DraftKings and Sormaz was vice president of design at Spotify.
By the end of the year, Sorare is aiming to have a total of 230 employees, and it is likely to sign deals with other U.S. leagues in the coming months.