The young shoot has golden buds.
The French start-up Sorare announced on Tuesday September 21 that it had raised 680 million dollars (580 million euros), which constitutes a record for the new technologies sector in France.
With these new resources, Sorare, an online game at the crossroads of speculation and "fantasy football", is aiming high.
Now valued at 4.3 billion dollars (or 3.7 billion euros), the young Parisian company founded in 2018 claims the first place of French "unicorns" (unlisted companies worth more than 1 billion).
The young French shoot has been walking on the water in recent months.
At the beginning of September, it announced a partnership with the Spanish football league, allowing it to license the first and second division clubs of the Spanish league.
Happy to be part of this world class team!
#OwnYourGame ⚽ https://t.co/Tx8miV4JLE
- César Azpilicueta (@CesarAzpi) September 21, 2021
Despite the little publicity and his deficit of celebrity with the general public, Sorare is supported by renowned investors, such as footballers Gerard Piqué (FC Barcelona), Rio Ferdinand (Manchester United), Antoine Griezmann (Atlético Madrid) and César Azpilicueta ( Chelsea).
An innovative concept
"Sorare is positioned at the crossroads of two very stimulating sectors: digital collectibles and 'fantasy sports' [virtual sports games]", boasts Marcelo Claure, CEO of SoftBank, the Japanese group that led the fundraising.
In this game using blockchain technology [storage and transmission technology without a central controlling body], users buy and sell football player cards, the value of which depends on performance in real matches.
Users compete against each other using these cards by forming teams of five - a keeper, defender, midfielder, attacker, and joker.
Each receives a score out of 100, calculated by an algorithm fed by the figures of the statistician Opta, the scores of the five players of the team being boosted by the value of the card, then added up.
>> To read also: Rise of NFTs: when art becomes crypto
The cards are non-fungible tokens (or NFT, for "non-fungible token" in English).
There are several scales of rarity.
Unique cards, one per player per season, give the best bonuses.
They are auctioned off by Sorare every minute - this is where the company makes its money.
The record is held by a single Cristiano Ronaldo card, sold for the modest sum of 280,000 dollars (approximately 239,000 euros).
Monetary exchanges are made in Ethereum, a cryptocurrency, even if on the site, the amounts are indicated in euros.
Sorare claims more than 250,000 active players, of which between 30,000 and 40,000 have at least one paying card.
The rest is content with unlimited free cards offered at the start of the game, but which very quickly turn out to be outdated.
A time consuming and addicting game
There are various ways of using the platform.
Some try to collect their favorite players to build a dream five.
Others join the platform for purely speculative purposes, trying to grab cheap tokens and resell them when the player performs and their card therefore increases in value.
"I have a friend who only does 'trading', he buys injured players and sells them at a profit," says Julien Bochereau alias Kinshu, 36-year-old journalist covering the gambling industry interviewed. by AFP as part of an investigation into Sorare.
"Today, my gallery is worth between 30,000 and 40,000 euros. From the outset, I invested 15,000 euros, and I do not regret at all."
Playing at a high level is expensive.
Jordan, another player contacted by AFP, explains having invested "6,500 euros between May and October 2020" and "then, I improved my gallery by reselling players and winning cards. For resale, I estimates to have made 18,000 euros net of profit ".
Sorare thinks big
Sorare currently has 30 employees, but wants to increase to 200 next year by taking advantage of the new financial windfall.
“Our ambition is to create the world's leading sports entertainment group,” said company co-founder Nicolas Julia.
"This amount allows us to focus on our product until a potential IPO within a few years."
It must also forge new partnerships with clubs and leagues which will recover the royalties on the use of their brand and require a guaranteed minimum income.
Sorare ultimately aims to be associated with the twenty biggest leagues in world football.
Sorare also wants to internationalize by opening an office in the United States, where the public has better knowledge of NFTs and cryptocurrencies as well as a strong tradition of collectible cards.
"Giants will emerge in the crypto and NFT sector. It is no longer a fad of a few hackers [pirates] who would seek to make money on an unreal asset," says AFP Matthieu Lattes, co-founder of White Star Capital, which recently created a fund dedicated to these young shoots.
According to him, this record lift also demonstrates the "maturity" of growing start-ups in France, as are the IPOs of French tech companies (Believe recently and OVHcloud soon).
Still, gray areas remain in Sorare's business model.
First of all, relying on cryptocurrencies for its transactions, the game is subject to market volatility.
In addition, as the market is innovative, regulations are still in their infancy.
"NFTs are still unclear in the regulations in France. Innovation is going too fast for the regulator", explains the blockchain director of KPMG France at Challenges.
Finally, the NFTs could also be caught up by the regulator because of their pecuniary nature, Sorare could thus be considered as a gambling game.
The application of the app can hold out the prospect of winning a quick fortune and pushing to invest large sums at the risk of losing them.
While the harmfulness of sports betting was highlighted during Euro-2021, Sorare could be regulated for public health reasons.
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