Web3-enabled fantasy sports platform Sorare made headlines recently when it announced that it would be laying off 22 employees from its New York office. This move comes as the company prioritizes concentrating certain teams at its Paris headquarters in an effort to improve communication and efficiency.
This decision was not made lightly, as Nicolas Julia, co-founder and CEO of Sorare, explained in an email to TechCrunch. While the New York office will not be shutting down completely, the majority of its product development team will be relocated to Paris, where they will have the opportunity to collaborate more effectively on Sorare’s football, baseball, and basketball offerings.
But what about the employees who were laid off? According to a source familiar with the matter, 13% of the staff at Sorare’s New York office were let go, while another 11 employees were offered the option to relocate to Paris. The company plans to backfill most of these positions in Paris and is looking to hire an additional 20 roles over the next six months.
Despite these changes, Sorare’s partnerships with popular sports leagues like MLB and NBA will remain intact. These partnerships, which have been locked in for several years, will continue to be managed by teams based in the New York office.
While the layoffs were not financially driven, a source stated that, like many other web3 companies, Sorare is facing longer timelines to reach its growth goals. The company’s primary source of revenue comes from issuing and selling new cards, but it also allows users to buy and sell NFT cards from other players on its platform. Despite seeing $200 million in user transaction volume in 2023, Sorare has not disclosed its profitability or remaining runway.
Sorare, which reached a whopping $4 billion valuation after its Series B round of funding in 2021, has not raised any capital since. In fact, according to secondary data platforms, it has not been attracting much interest from investors. This is not a unique situation, as the web3 space has seen a decline in investor interest overall. In fact, web3 companies focused on gaming raised 74% less funding in 2023 compared to the previous year.
It seems that web3 gaming startups have struggled to find solid ground in the market. Even companies like Mythical Games and Dapper Labs, which have raised significant amounts of venture money, have experienced rounds of layoffs in recent months.
Web3 companies have largely fallen out of favor with investors.
However, despite these challenges, Sorare remains hopeful. The company has a dedicated community of nearly 13,000 people on Reddit discussing its fantasy games, and its own third-party media covering the competitions. With this level of engagement, Sorare is determined to weather the web3 winter and come out stronger with its reorganization.
