Sorare, a web3-enabled fantasy sports platform, recently made the decision to lay off 13% of its staff, specifically 22 employees from its New York office. The move, according to a source familiar with the matter, aimed to concentrate certain teams at the company’s Paris headquarters to enhance communication and efficiency. Sorare’s co-founder and CEO, Nicolas Julia, explained that centralizing the product development team in Paris would foster effective collaboration and contribute to building exceptional products across their football, baseball, and basketball offerings.
While 11 employees were asked to relocate from the New York office to Paris, Sorare plans to backfill most of the laid-off roles in the French capital. Julia anticipates hiring over 20 new employees within the next six months. It’s important to note that Sorare is not shutting down its New York office and will maintain teams there that work with U.S. customers and handle U.S. brand partnerships with leagues like the MLB and NBA. The company’s partnerships with these sports leagues are solid, with contractual agreements lasting several years.
The layoffs at Sorare were not driven by financial reasons, according to a source, but rather by the company’s realization that the timeframe for achieving its growth goals might be longer than initially anticipated. Sorare allows users to buy and sell NFT cards on its platforms, generating revenue by issuing and selling new cards. In 2023, Sorare witnessed $200 million in user transaction volume. However, the company has not disclosed whether it is profitable or the extent of its remaining runway.
Sorare’s last funding round was a $680 million Series B in 2021, valuing the company at $4 billion. However, secondary data platforms indicate a waning investor interest in Sorare. This decline in interest is not unique to Sorare alone, as web3 companies have generally fallen out of favor with investors. In 2023, web3 startups in this category raised $7 billion, a decline of 74% compared to the $26 billion raised in 2022. Overall venture funding also decreased by 38% during the same period.
Web3 companies specializing in gaming have faced significant challenges in gaining substantial traction. Video game-focused VCs recently revealed that the market for web3 games turned out to be much smaller than some investors had hoped. This reality has been reflected in the struggles faced by companies like Mythical Games and Dapper Labs, which have undergone multiple rounds of layoffs.
Amidst this uncertain landscape, Sorare stands out due to its active community of nearly 13,000 individuals on Reddit who regularly engage in discussions about the platform’s fantasy games. Additionally, third-party media outlets are dedicated to covering these competitions. Sorare’s reorganization efforts aim to navigate the challenges of the web3 industry and position the company for success.
FAQs
Q: What is Sorare?
A: Sorare is a web3-enabled fantasy sports platform that allows users to buy and sell NFT cards related to popular sports leagues like football, baseball, and basketball.
Q: Why did Sorare lay off employees?
A: Sorare implemented a reorganization plan to centralize its product development team at its Paris headquarters, leading to layoffs in its New York office. This decision was driven by the company’s goal of improving communication and efficiency.
Q: Will Sorare shut down its New York office?
A: No, Sorare will maintain its New York office and retain teams that work with U.S. customers and handle brand partnerships with sports leagues like the MLB and NBA.
Conclusion
Sorare’s recent layoffs and reorganization plan highlight the challenges faced by web3 companies in the gaming industry. As the company adapts to the evolving landscape, it remains committed to its active community of users and aims to deliver exceptional products in the fantasy sports market. The future of web3 gaming may be uncertain, but Sorare’s strategic actions demonstrate its determination to navigate these challenges and emerge successful in the long run.
