A fantasy football game where players collect and trade non-fungible tokens (NFTs) of their favorite players is now France’s most valuable start-up.
Paris-based Sorare raised $680 million (€580 million) in a financing round led by Japanese conglomerate Softbank, setting a European record for Series B funding.
The investment values the company at more than €3.6 billion.
With funding secured, the company plans to expand into new sports from 2022, said Sorare co-founder Nicolas Julia.
What is Sora?
Founded in 2018, Sorare is a fantasy football game where players buy and sell cards with real football players. Each card is registered as an NFT on the Ethereum blockchain, which acts as a certificate of authenticity.
Players can also build their own fantasy team of five Sorare NFT cards and participate in tournaments for cash – paid out in the form of the cryptocurrency Ether. The performance of a given card is related to the real performance of the footballer on it, adding an element of financial risk to NFT trading.
The cards are all officially licensed and major European clubs such as Paris Saint-Germain, Real Madrid and Premier League club Liverpool have signed up.
Not every map on Sorare is created equal. Each season, 1,000 limited cards, 100 rare, 10 super rare and only one unique NFT are minted for each football player in the game.
This creates a secondary market where players buy and sell the NFT cards, the value of which fluctuates in line with demand and a footballer’s real-world performance – simply put, rarer cards featuring star players such as French forward Kylian Mbappé or Manchester’s Christiano Ronaldo United will be worth more.
And that’s where more financial risk comes in. The value of Sorare’s NFTs can go down as well as up, with real-world factors such as a footballer’s performance or future prospects affecting the value of their NFT.
Sporting NFT market growing
Sorare is the largest sports-based NFT platform in terms of sales volume, according to NonFungible.com, a website that tracks NFT market data.
NFT sales on Sorare have totaled over $128 million as of January this year. The platform’s most expensive unique card features Cristiano Ronaldo and was purchased in March for €245,072.
“We saw the tremendous potential that blockchain and NFTs brought to unlock a new way for football clubs, soccer players and their fans to experience a deeper connection with each other,” said Nicolas Julia, CEO and co-founder of Sorare.
“We believe this is a huge opportunity to create the next sports entertainment giant,” he said.
“We think NFTs represent a new paradigm in collectability, usability and engagement in assets,” Michel Combes, president of SoftBank Group International, told Reuters.
Clubs redeem crypto
Earlier this month, Spain’s top club, La Liga, signed a deal with Sorare to take the clubs out of the league and onto the platform. It followed similar moves from other international leagues, including the German Bundesliga and Japan’s J1 League, which were enticed on the platform by the revenue generated by the NFTs.
In August, Argentine star Lionel Messi received a “welcome package” worth around €30 million after moving from Barcelona to France’s PSG.
The star’s sign-up fee included a payment in PSG’s own cryptocurrency fantokens, provided by Sorare competitor Socios.
Fantokens are a type of cryptocurrency that allows holders to vote on mostly minor decisions related to their clubs. Among the clubs launching tokens this year are English Premier League champions Manchester City and Italy’s AC Milan.
Like Bitcoin and other digital currencies, fantokens can be traded on exchanges. They also have a propensity for wild price swings, prompting some financial regulators to warn investors.