Sorare became one of France's hottest startups thanks to its fantasy football platforn based on non-fungible tokens (NFT).
The company burst into the international spotlight in early 2021 following a €40 million Series A round of venture capital led by Benchmark and Accel, two international biggies. Just a few months later, Sorare announced it had raised a record $680 million Series B round of financing. SoftBank led the round which also included money from new investors Atomico, Bessemer Venture Partners, D1 Capital, Eurazeo, IVP and LionTree as well as previous investors Benchmark, Accel and Headline.
Just two years earlier, Julia was struggling to explain the NFT concept to investors on the way to raising a pre-seed round of €550,000 in 2019. That was followed by a €3.5 million Seed round in the summer of 2020 with French and European investors.
While NFT hype has ebbed since those days, Sorare has continued its international expansion, signing partnerships with the MLB and NBA in the U.S. Still, the company confirmed in March that it was re-organizing and consolidating staff in Paris, and cutting 22 positions in its New York City office.
In June 2023, I interviewed Julia on stage at Viva Technology along with Eurazeo Managing Partner Guillaume d'Audiffret, one Sorare's first investors. Below is an edited transcript of that conversation and the full video.
Q: What is Sorare?
NJ: Sorare is the connection between two things people love to do and have been doing for centuries: collecting things around sports and playing with these collectibles in cool games. Sorare is about this intersection between collecting and playing, with the unique twist that you truly own your game items, you can trade them, and so on.
Q: This is a new category of tech products. How did you find the product-market fit? And how did you go about convincing investors that this was actually a legitimate thing?
NJ: It's a new category. And this is something that excites us a lot, to be able to build the biggest brand in the world of sports and building something new, not taking something that's working elsewhere. In terms of finding the product market fit, it's a lot of fun. It's a lot of iteration. And I would summarize it by two things. Talk to your customers every day. Listen to them, and improve the product to build something that they love. When you get product market fit, you know that something is happening. People are coming to your door without you even knowing why they're coming.
Q: What is it about a company in that situation like Sorare that convinces you to take a chance on it?
GDA: As VCs and investors, what we love is huge markets. In the case of Sorare, it's the fantasy market, fantasy sports, and also collectibles, combined in one company. So that was very attractive for us. The numbers, and the performance were absolutely phenomenal. So the company started five years ago, users in the 1000s and 10s of 1000s, with huge engagement rates, and also a company that managed to have a business model on top of a product. That was very attractive to us.
What's also interesting is the high barriers to entry. They developed a lot of very valuable IP with soccer clubs, and also with soccer athletes. And then finally, the team. When we first met with Nico, we thought that his vision was lightyears ahead of everything that we'd seen in the space. And then the team that he had at the time and the platform that they built was hugely impressive.
Q: What was Sorare's thinking early on strategically that convinced you could scale internationally and win partnerships with major U.S. sports leagues?
NJ: I think the first thing is if you want to build the biggest brand in the world of sports, you need to take the US market very seriously. In our case, it was about working with the NBA. And then you have like big competitors in the US that are bidding against you. So how do you manage to convince the sponsors that you are the right partner to build the category and to build the market with them? You need to have around you people that they trust. You need to have investors that they trust in Europe and in the US.
Also, you need to have athletes behind you as well. So Serena Williams, for instance, was sitting next to us to discuss their skills and help us close the deal. And you need, of course, the right product and the right team to execute your vision. (Note: Serena Williams invested in the company and joined the board in 2022.)
So I think that's how you get to have the sponsorships in place. And then you need to grow the brand in the market. And of course, they have massive audiences. So you try to leverage them to go to market.
Q: Sorare has this massive community around podcasts, blogs, etc. of people who are involved in the Sorare system. It's a massive ecosystem unto itself. How important is that?
NJ: I think the community element is one element that we don't discuss a lot. But I think that is a massive advantage because there's not a single day, not a single week where people want to spend time together, create content, those kinds of podcasts, side games, like streams and so on that are created because you know, people are passionate about the sport, are passionate about the brand and feel they own the items. They feel a level of connection that they've never felt gaming. Every year, there's $100 billion that is spent on games hwere people won't own the item. So it's money that they can recover. That's just a paradigm shift for the gaming industry.
Q: When you're looking at the mix of VCs you have in the cap table, what do you want those VCs to help you with beyond the money?
NJ: The check is important, the valuation is important. But actually, for the four rounds of financing we've made, we never took the highest valuation because the people that are going to build with you for the decades to come are as equally important. If I take concrete examples with our partnerships, we also have been talking about regulations. When you create a new category, you are moving lines, and so you need to know frameworks that are right. And so lhaving people that you know, and investors and entrepreneurs that went through that is very important. Also, the connections for hiring. As you you grow in size, you need to add value to your team so that there are areas where they can help a lot as well. And introductions to potential customers.
Q: Where do you see Sorare in five years?
NJ: We have one goal, which is to build the biggest brand in the world of sports. To do that, five years from here, we want to have the biggest community in the world of sports. So the place where you spend time with your friends, you meet new friends, you consume sports, you engage with the sports, with gaming, and you collect and you connect with the athletes that you love, and the teams that you love. That's what we're building at the intersection of: social network gaming, collecting, so different categories that exists to build a product that is unique.
Sorare at Bpifrance
More recently, Julia participated in the Bpifrance Sport Definition conference, including an interview on stage and a 1-on-1 with the banks Big Media team. Here are both videos (in French, but with English substitles):
