Very well. Thanks for coming back to see us.
Yeah. It was 2021, I think.
It's been almost 5 years to the day.
September '21. You have a good memory.
[growl] Well, you remember it well because a few weeks later you did your mega fundraise.
So obviously you know very well what period it was. At the time, where were you? In the 10th, I believe. You were recruiting people one by one. And I think we did that on an app that disappeared. No, it wasn't a, you know, those apps where there was...
Oh no no no, it was, I had moved, we had done it, we had recorded it. There you go.
Yes, we had recorded it. But you're thinking of... where it was a bit like radio radio? I forgot the name of it.
I don't even have it anymore. Yet, I think you had probably interviewed me on that app too. We may have done it twice. You're right. First there and then on the podcast.
Well, a few months after our interview, you were indeed at the peak. So 680 million raised, 4.3 billion valuation, completely crazy growth, the explosion of NFTs in the good sense, and then we go back the other way with the bursting of that bubble. Big drop in your activity this time, so the years 22, 23, 22, 23, 24 especially, with a recentring afterwards on Paris, a restructuring, and today, well, this restart. That's why you and I decided to do this episode, and I believe that, moreover, it's the first time you're really speaking out to explain how things are going better.
That's it. I wrote something, well, I wrote a bit on Twitter, on X, but it's the first time I'm speaking out like this.
Plus 85% net revenue in the first half. You added 100,000 buyers, 1 million new users, yeah, over 18 months, and also, well, what is it, 15 days, 3 weeks ago, a capital increase, so a new fundraise. You didn't specify the amount, maybe you'll do it today, I don't know. So you just gave an indicator. You said it's 8 figures, so it's at least 10 million, let's say between 10 and 100 million. We're going to tell, if you will, together for 3, 4 hours the three acts of Sorare: so the ascent, the crisis, and the comeback.
For a few months now. Let's go. The journey, we'll keep it very short because you've already been here, so you went through consulting, you did AI, blockchain at Stratumn. That's where you meet Adrien, co-founder Adrien Montfort. And what gave you this crazy idea in 2018 to launch this? Tell us first about the passion for sport, because you don't do what you do if you don't have a passion for sport, if you don't have a passion for athletes, for fans, etc. So it's the encounter between a new technology that allowed doing new things around collecting, and in the end that's what built the vision of saying, well, we need to give every athlete a card to play with and let everyone have a card to play with, and to finally build a new game inspired by collecting and fantasy sports. So this idea of being able to build teams and progress based on the players' performance on the pitch. So it came from that. It was an idea that was a bit, let's say, exotic at the time, but it was a new category, and that was also, I think, what drove us, what excited us, saying we're not going to just copy-paste what's already very hard in itself, but we're going to try to create something new, and that's where there's fabulous potential to exploit. So Panini plus fantasy football plus digital ownership, plus there was the blockchain NFT aspect.
And that, yes, to understand, you lost a lot of investors, yeah. Until the day you raised, there you go.
Yeah, indeed, actually, well, the idea, when you summarize it, is ultimately very simple. It's you build a football team with digital cards, and then you can win things. So it's collect, play, win, three words. So it's true that there was a combination with, notably, a new technology that was there, and in business terms, a bit removed from what was very popular at the time, notably in France and Europe, SaaS, a bit classic that we can know. So we were a bit far from all that, and we had, there you go, a risk profile necessarily different from certain tech companies. So it's indeed the first fundraises were very difficult.
And in 2 years, 2 and a half years, it's a hit. You're going to end up doing, I don't know, more than 100 million in revenue, yeah. Well, actually, when does that happen, by the way, because you'll do more than that. But in 2022, we even did more than that. But to bring you to this mega raise, [throat clearing] in the summer of '21, what convinces the investors who are going to say, 'OK, well, it's a hit, it works'?
I think there were, at that level, several major pillars. There's one pillar, there's the team first, the quality of the people who are there. Obviously, everything starts from that. There was growth, there was growth that was stratospheric, well, you can look at all the indicators. The market potential, which is immense. And then the beginning of a sports rights infrastructure, which is also our defensibility, I apologize for the term, but there you go, which creates a barrier to entry for new entrants because we have today more than 300 partners worldwide, and apart from Electronic Arts and maybe Fanatics, there are very, very few companies in history that have managed to create something this deep.
When you say 300 partners, it's clubs, leagues signing with you.
Exactly. Teams, through rights, you can use the players' faces and there you go, in football, in basketball, in baseball. And so we had the embryo of that, and the reason for the raise in reality was to accelerate on that, because at the time we did this raise, we were 17 people in Paris, and then we had the Belgian league, a few French clubs, a Spanish club, but we hadn't signed any major league. So we raise telling ourselves, we have to manage to sign the biggest sports leagues in the world. It's going to cost us a lot. The big American players are going to come at us, and that's exactly what happened. We went and signed MLS, it cost us a lot, too much. And then when the market turned, we had to restructure a good number, well, all of these contracts, because you arrive with an oversized ambition and you do something that had never been seen in France, maybe even in Europe, yeah, you're going to raise 680 million.
That's it. All of that raise, that's it.
So there was a mix of primary, so money that came into the company's bank account, and secondary, early investors who wanted to provide liquidity. The primary share, so into Sorare's account, was 400 million euros, which was a unique amount for France and for Europe on a Series B at the time.
OK, so yeah, a lot of cash on that raise, but 400 million is huge. What's going to cost you the most on the teams you mentioned, the 300 partners? It's the NBA, and you're going to have to convince and write a huge check to have them with you. The big US sports leagues, the Premier League, it was the leagues, well, then it follows the audience and notoriety of the leagues a bit. So no surprise, the big US sports leagues and the Premier League. Knowing that there's also a rights infrastructure in the US that's a bit different, with a players' union and a league. So there are two players to pay who will redistribute the money either to the players or to the teams. So there you go, that's indeed what cost us US basketball and baseball and football.
Football. Yeah. There you go. Yeah. And then after, the other big leagues...
How much does each cost? It's tens of millions each time.
So it's in tens of millions, let's say that by adding certain leagues and unions on certain sports, we were able to get back, we went back very, very quickly. Fortunately for Sorare, there you go, we renegotiated, for some 6 months after signing, we were already in the renegotiation phase because we saw that the market wasn't doing well. So we went very quickly, they understood, and there you go, we had this chance, well, we were always very transparent with them and we maintained those relationships. We had the chance that they accompanied us in these renegotiations because even if it was taking more time than expected to accelerate, the potential was there. It was still additional money for... there wasn't much else exactly... for a product where there was still an existing fan base that was there. So there you go, we had the chance to carry out these renegotiations well.
Well, so when do you realize it's not taking off, it's not going as fast as we expected, but we talked about the NFT bubble, but beyond that, because the NFT, in a way, the fact that it's a digital asset on the blockchain...
That's the tech. Well, whatever, if the players had loved the product, they would have kept playing. That wasn't really the issue.
Well, actually, yeah, actually, if you don't want a market, you had too many competitors in front of you. What was the problem? Let's say there are two things. The first is that we experienced the bursting of the bubble with a slight delay compared to the market where there was only speculation on a digital asset like CryptoPunks for example, you see. So we had a slight delay compared to that because we had a utility value with the gameplay that was around it. But we still experienced it because we had part of the community that had arrived at that time with the idea of buying a card and reselling it tomorrow for more, without necessarily buying into the gameplay that was there, etc. And so that whole community that had helped drive revenue upward left the platform. And so that's where we had to start reinventing ourselves. Obviously reinventing ourselves by renegotiating, restructuring by renegotiating contracts, but also by reinventing the product.
So you have to put yourself back in that era, it's the famous monkey heads, the Bored Apes, those things selling for hundreds of thousands, millions. [throat clearing] So you're caught up in that when it's going up, they want to speculate on...
There was this speculative bubble where we had people who were buying cards from us without necessarily any knowledge or even passion for sport, but there you go, like they could have bought at that time, like you say, a monkey or a punk. And so indeed, when the tide goes out, we kept a very solid community of sports enthusiasts, smaller, more niche, and from there we had to rebuild, rebuild in product by moving away from this speculative wave and building something sustainable that can last in the years, decades to come. There you go.
More niche, it's still football though.
It's football, it's the number one game. Yeah.
When I started in journalism, I had a teacher who told me, he wasn't alone. In France, there are three, I've told you this a thousand times, there are three sports that count. One, football, two, football, three, football.
That doesn't please everyone, like tennis or rugby. But well, that's how it is.
No, it's the number one sport. But our historical product, which is Sorare Pro, remains a product, and even today, that isn't meant for all football fans. It's not a product meant for someone who watches football once every 2 years during the Euros or the World Cup. There you go, it's a product, you have to watch football regularly, you have to like numbers a bit and dive into it a bit. So it's not a very mass-market product, and that's also one of the reasons why we launched other products afterwards with Sorare Arcade and now Sorare Snatch, which reach other audiences, much more mass-market.
How do you experience going from a fundraise we'd never seen in France, let alone Europe? You see such a big raise at the time, for a few weeks, a few months, you're going to be the most valued French startup. Even though you yourself said that even before spending the first euro, you were 17. We'd never seen that. How do you experience that? Well, listen... How do you keep a cool head?
Well, I, from the start, well, I think I'm a fighter. [laughs] I don't give up and I never will. So I've always, well, it wasn't the first difficulty where I was going to slow down or let myself be defeated, because I think I have that a bit in my character. The second thing is that I knew the potential remained monstrous even if the market was pulling back, even if we ourselves made execution errors. It's not just the market. There are things we didn't do well at different moments. And because I stayed, even when it went up very fast, very strong, with a certain number of ballers, with my feet on the ground, with a family, with friends, well, with, there you go, let's say an inner circle, to use a term athletes often use, which allowed me to keep my feet on the ground and to reinvent ourselves and to reinvent myself too.
Did you almost stop with Adrien Montfort? Did you say, maybe we're going to close the company?
Never. No, never crossed my mind. I know, as you know Adrien, he took a step back operationally 6 months ago, so he remains active on the board of directors. But as two, or me alone now, we've always kept an unshakeable belief in the company's potential, in the team's potential. And also for our community, something very, very strong to continue serving them despite the difficulties there may have been along the way.
So from 17, you went up to how many at the peak?
[throat clearing] At the peak, we were around 150. Yeah. Yeah. At the peak. And today, we're 65.
That's not huge, actually.
No, it's not huge. Actually, I was even saying at the time we did this fundraise, where there were lots of companies around us hiring hundreds and hundreds of people, I always thought there was a pace for an organization to digest arrivals, and that if we went too fast, too hard, it would break. So we were quite careful, and that allowed us later, when we had to retreat, for it to be less painful. It was, but less than if we had gone up with a much bigger staff.
But you realize that, yeah, you experienced, you took us on a roller coaster like almost no one will know, you see, being at the peak and then having to close an office in New York, do a plan, a restructuring, etc. There are many who know it, but they don't come from up there, so they don't leave from there, you see, they fall from much less high.
Yeah. Listen, the path, the path is what it is, it's not linear, but you have to know where we're going, why we're going there, who we're going with, and that we never doubted, we never really changed. So that's what kept us going through it all.
Did you get a coach, how did you get help?
Yeah, there was indeed, I took several actually over time, traditional coaches, you know, to help me progress actually, because I think it's also successive reinventions you need as a CEO to move from step to step, and knowing how to surround yourself is important. And having a coach you can tell everything to, share everything with, is very, very important too, because in fact a board of directors is a particular body, but it's different to have someone, there you go, to whom you can also share your state of mind and more personal things.
If we go back to the numbers, you did up to hundreds of millions in business volume. So net net, what was it? About 140 million in '22. In '23, you start the decline or was it even higher than that?
No, we had, indeed there was a decline in business volume starting in 2023.
OK. And at the bottom of the pool, you did how much?
At the bottom, it was last year, it was 40 million in net revenue.
And so now we're back on a growth dynamic since the second half of last year, we did 17% year-over-year growth, and in the first half of this year, we did 84% year-over-year growth. So there, we should finish the year around 55 million in net revenue. So there you go, we're happy to be back on this dynamic, and all of this was driven by a new product called Sorare Arcade, which is a more mass-market product.
So, let's go. You said it. So, there are three big products. Three families: Pro, Sorare Pro.
Sorare Pro, which is the historical product, it's for those who follow Ligue 1 every week and the others obviously, it's, there you go, it's sports enthusiasts who watch several matches per week, and so there's this dynamic of collecting, playing, and rewards. There's also the possibility to resell cards for real money and rewards that are the highest in our entire gaming ecosystem. So that's the Sorare Pro product. Next to that, we launched a new product called Sorare Arcade where you can start playing for free with packs, and so every day free packs. So still these three pillars of collecting, playing, and rewards, but with simplified gameplay. There's no possibility to exchange cards for real money or resell them. But there are rewards that can be monetizable in this game mode. So that's on Arcade, and it's this product that...
It's freemium. Exactly. There you go, that's what's a hit.
And how many players do you have on it?
So around the World Cup, we were at 7-day actives a bit above 400,000 during that period, but it was indeed a peak seasonality period. Now in September, we'll be between 250 and 300,000, which is largely, well, basically, we launch card sets every 3 months around a theme. So it was Stellar before the World Cup, Colors for the World Cup, Hyper Glitch right now, and so there you go, there's also a whole creative dimension around the cards that is dear to us and that the community appreciates. And so there you go, we're in the middle of a boom with this new product that's carrying us and that's going to do almost 20 million euros in net revenue in its first year since we launched it on January 15.
OK. And the third is Snatch. Sorare Snatch.
Exactly, it's Sorare Snatch. So the vision, as I told you in the intro, is that every fan has a card to play with, and so sports fans, they have, well, it's like you say, it's an audience that's huge in France and everywhere in the world. And so it's a different gameplay that reaches another audience. So it's a gameplay where there's still this pillar of collecting and playing. The reward here is status-based. Basically, it's more playing with friends, there are no monetizable monetary rewards. The gameplay is based around card battles. So basically, you'll create your club by collecting cards that you can get for free on the market all day. Then, you'll build your club and go challenge friends to take their...
Take their Mbappé card, I'm going to take yours.
Exactly. And so do football card battles. There you go, I think there's an absolutely colossal market to capture, obviously, on gaming and card collecting. Physical cards are booming, but there you go, as you know, our lives are becoming more and more digital, and I think having cards also on your phone, in your digital life, is something that resonates with a new generation of fans, and we want to be the leaders in that market.
I'm old school, you know. I still spent a fortune this summer on FIFA cards and all that.
One doesn't prevent the other.
I'll have to do both. You're right. You're right. [laughs] So the comeback is also reflected through your investors. I say your investors because you just did a new round of 8 to 8 to 10 figures.
Oh yeah, you didn't specify. So it's at least 10 million, right? But less than 99 million. Yeah.
But because, yeah, since it's with your historical investors, there's no need for details, no valuation, there's no need, I think with...
I'm going to tell you something I don't think I've said, but the advantage of the fundraise and the public announcement we made is that it put a spotlight on the company. It allowed us to recruit great people, etc. So there you go. But the company was long marked by that. Sorare was the company that had raised. As an entrepreneur, you don't build a company to be marked as, you know, you raised a lot of money at a big valuation, no? You build a company because you want to recruit the best, you want to build a product that reaches the most people, etc. And there you go, that's why you do it. So there, I'm not going to shock anyone by saying that obviously the valuation is lower, that obviously the amounts raised are less than what we were able to raise at the time. But beyond that, I want us to be remembered for the number of people we reach, for the revenue we generate and will generate, and for the impact we'll have, you see, rather than for those numbers. So that's part of my decision.
Well, actually, yeah, you see, I had skipped one of my questions, but it's exactly that. Did raising that much turn out to be a chance or also the beginning of some problems?
