Like everyone who feeds on public money without ever turning a profit, Sorare has never published its accounts, and we have to make do with Julia’s statements and a few leaks.
In February 2021, Julia announced €11M in revenue for that month alone, and said he was aiming for €1bn in revenue by 2024. At the time France accounted for only 20% of transactions. In late 2021, Julia spoke of “more than €100M in revenue”15, which propelled the company into the Next40. Yet in January 2022, Les Echos, France’s leading business daily, told a different story16:
“Sorare confirmed to Les Echos that its revenue rose by nearly 3,900% in 2021, to $325M, against $8M at the end of 2020. Well ahead, then, of the already ambitious forecasts put out by its CEO Nicolas Julia, who was aiming for $200M.”
According to my information, the $325M is not revenue… but transaction volume. To understand the difference, we need to go back for two minutes to Sorare’s business model.
Their job no. 1 is producing cards, thanks to the licences they bought, then selling them. That’s the primary market. In 2021, it came to around $100M, but depending on the agreements, the leagues and clubs would take between 10 and 20% of the amounts. Information confirmed by an expert, but denied by a Series A VC.
But there is also a secondary market. And unlike the one for video games or Pokémon cards, run by intermediaries who pay nothing back to rights holders or publishers, and unlike the one for shares, where only the intermediaries get paid, the NFT one works differently. Because when the smart contract is deployed, a fee for the issuer can be added. In this case Sorare takes 5%17, though apparently not via the smart contract but rather through fees on its platform.
So does it make money? Well, we have a first clue from the state of the secondary market. While it seemed for a while to benefit from the crypto rally and the NFT madness, the rebound in late 2024 isn’t enough to call it a revival.
Sales (in USD) on the secondary market for Sorare NFTs, by month.
All the more so as the average transaction price is collapsing, which tends to show this isn’t exactly a revenue stream with a future…
Average price per transaction (in USD) on the secondary market for Sorare NFTs, by month.
If you keep the 5% figure constant, you get less than $43M in revenue since launch.
As of today, the market cap has collapsed to $1.3M. A far cry from Axie ($85M) or Gods Unchained ($67M).
The problem is that the secondary market is a fairly reliable indicator of activity levels. According to information I was able to confirm:
Given that we know the secondary market, that we already have visibility on 2025, and that past revenue figures have been confirmed to me by several sources18:
… we can sketch out the broad picture.
With $45M of secondary volume for H119 and a downward trend, the year will end at around $80M, or €70M (-29%). That means €25-35M in revenue. Though Sorare says it is projecting €42M20.
You don’t need a PhD to understand that, even with the staff cuts currently under consideration, it won’t be enough in the medium term.