But let’s rewind a little. After a few months in existence, Sorare does a pre-seed round in May 2019 and raises €550K from business angels, including French telecoms billionaire Xavier Niel, who puts in €100K through his fund Kima, alongside the British fund Seedcamp (already a shareholder in Revolut) and the American ConsenSys Ventures. At the time, the start-up has only three people and has just signed with the Belgian football league (24 clubs, 600 players).
In July 2020, Sorare follows up with a $4M seed round led by e.ventures and German footballer André Schürrle (2014 world champion), with Partech taking part, the idea being to structure the product and get a stable MVP3.
The story speeds up in February 2021, at the start of the NFT euphoria. Sorare raises €40M in a Series A with prestigious investors coming in: Benchmark, Accel, Headline, plus big-name business angels such as Antoine Griezmann, Gerard Piqué and Alexis Ohanian4.
But it is of course in September 2021 that everything changes, and Sorare makes history for the French Tech, as France’s start-up scene calls itself. The start-up announces a monumental $680M Series B led by SoftBank through its Vision Fund 2. This record round values the company at $4.3bn. Also taking part are Atomico, Bessemer Ventures, IVP, LionTree, along with the existing investors. Sporting figures such as Rio Ferdinand and Serena Williams join the adventure, as do ambassadors such as Kylian Mbappé, Lionel Messi and Zinedine Zidane, who get shares, apparently in exchange for their image.
I’ve already said several times what I think of SoftBank, which to me is one hell of a red flag. But they are one of the few VCs able to raise that much money, and at the time they were seen as a global benchmark. Especially as SoftBank has funded rather few French companies. After Vestiaire Collective, Contentsquare and Swile, Sorare is only the 4th. Unlike the Vision Fund 1 investments, it wasn’t Masayoshi Son himself who met the founders. According to a former SoftBank insider, the founders’ personalities actually counted for fairly little, and it was the London office that handled the deal.
This pharaonic valuation puzzles everyone off the record. At the same time, OpenSea closes its Series B for $100M at a $1.5bn valuation. At $4.3bn, Sorare puts itself on a par with Dataiku, Dataminr, Bitpanda and even overtakes three web3 unicorns born the same month (Alchemy, ConsenSys and MoonPay). The company is valued as highly as… Eurazeo, the Paris-listed investment firm, which is also one of its shareholders.
What explains this exceptional valuation? A VC who took part in the round confides that without blockchain, Sorare would probably never have raised so much. A crypto entrepreneur shares this view. A leading figure among Paris VCs tells me off the record:
“What happened back then with blockchain is exactly what’s happening today with AI. Everyone wanted in, few people understood the substance, and the fear of missing the next Uber was stronger than reason.”
When I quip that most AI companies raising money today are just GPT APIs with a nice design, he replies:
“And what do you think the blockchain rounds of 2021 were?”
Ouch. Because indeed, when you look at the big web3 rounds of the period, you see that the premium went not to deeptech or to builders, but rather to B2C sellers who more or less exploit the technologies.
The context also explains this euphoria: in late 2020, Bitcoin passes $15K for the first time since December 2017. 2021 is marked by a huge bull run in which valuations soar across the crypto ecosystem. It’s also the era when Bored Ape Yacht Club apes trade for millions of dollars. And Sorare turns up in the right place at the right time.