NFT startups Dapper Labs and Sorare raise more than $ 900 million

Two start-ups in the hot NFT market raised a combined $ 930 million this week, underscoring investors’ continued appetite for cryptocurrency companies as the industry experiences massive growth.

Dapper Labs, which makes virtual trading cards for basketball, said Wednesday it raised $ 250 million in a funding round led by Coatue. Bond, the investment firm run by former Wall Street analyst Mary Meeker, and Singapore sovereign wealth fund GIC also backed the round.

The new round values ​​the Vancouver, Canada-based company at $ 7.6 billion, according to a person familiar with the matter who preferred to remain anonymous because the information is not public.

Sorare, a French fantasy football game that incorporates NFTs, also announced on Tuesday that it had pocketed $ 680 million in an exceptional cash injection led by SoftBank. Venture capital firms Atomico, Bessemer Ventures and IVP have also invested, as well as investment firms D1 Capital and Eurazeo.

French football star Antoine Griezmann and former England player Rio Ferdinand are also investors in Sorare.

The investment gives Sorare a valuation of $ 4.3 billion, the company said, making it by far the most valued private tech company in France and one of the largest start-ups in Europe.

NFTs, or non-fungible tokens, are a new but rapidly growing phenomenon in the crypto industry. These are digital tokens that represent the ownership of a virtual object, such as a work of art. Ownership is tracked on the blockchain, a digital ledger of transactions.

Unlike bitcoin and other cryptocurrencies, NFTs are not fungible. This means that they cannot be traded with each other like dollars or gold. Each NFT is unique and acts as a collector’s item that cannot be duplicated. However, the underlying media can still be viewed by someone else on the Internet.

“When you think of collectibles in the physical world, most of them have no utility value,” said Nicolas Julia, CEO and co-founder of Sorare. “You put them in an album and that’s good but it’s a bit borderline.”

“When you translate it into NFT in the digital world, you can do a lot more things, like use them in a game for example. But you also have a provable rarity, which is very appealing to collectors.”

NFT prices soared earlier this year, with sales reaching a record $ 2.5 billion in the first half of 2021. High-profile deals include a record $ 69 million work sold by the artist digital Beeple at a Christie’s auction and the $ 2.9 million sale of the first-ever tweet by Twitter CEO Jack Dorsey.

The huge sums of money flowing into companies like Dapper Labs and Sorare highlight how investors are chasing the next big thing in crypto.

Crypto and blockchain startups have received around $ 19 billion in venture capital funding so far this year, nearly triple the $ 6.4 billion raised by the industry in 2020, according to figures shared with CNBC by data company Pitchbook.

However, like other assets in the nascent crypto industry, NFTs have proven to be vulnerable to abuse from bad actors. Last week, the OpenSea digital collectibles marketplace revealed that insider trading had occurred on its platform.

Several sports organizations are turning to NFTs and other crypto assets as a way to generate additional income.

English Premier League club Manchester City, for example, have launched two NFT collections. Meanwhile, a number of football clubs have launched “fan tokens” which allow holders to vote on mostly minor club decisions and receive certain benefits.

Dapper Labs’ NBA Top Shot platform allows users to trade and collect highlights of basketball games in the form of NFTs. Highlights, or “moments,” are licensed by the NBA, which receives royalties on every transaction.

Dapper Labs has also developed its own blockchain designed for NFTs, called Flow. He had used Ethereum before but moved away from that network after his popular digital pet game CryptoKitties in 2017 resulted in slower processing of transactions. He is currently in the process of migrating CryptoKitties to Flow.

In addition to announcing its latest funding on Wednesday, Dapper Labs unveiled a partnership with LaLiga, Spain’s top soccer league, to introduce an NBA Top Shot-like experience for soccer fans. Dapper Labs said he plans to invest some of the new money in new experiences, like paid trips to big games.

“A portion of this funding will be used to expand the functionality of NBA Top Shot, develop a mobile product, and connect the digital fundraising experience to a fan’s experience showing up at a live game, or even to support his team on social media, ”Roham said. Gharegozlou, CEO of Dapper Labs, told CNBC.

It comes a week after La Liga announced a separate partnership with Sorare to add digital league player cards.

Sorare is also stepping up its rivalry with Dapper Labs, planning to expand into the United States with a new field office. Sorare has been approached by a number of US sports organizations, his CEO told CNBC.

Sorare also plans to launch a mobile app and register all of the top 20 soccer leagues by the end of 2022. Dapper Labs and Sorare have both indicated that they hope to take advantage of the huge following from the sports stars on social networks to promote their platforms.