Rather than closing its New York office entirely, Sorare is moving more employees to Paris.
Fantasy Sports with Web3 support The Sorare platform laid off 22 employees in its New York office in February. The move comes as the startup looks to centralize certain teams at the company’s Paris headquarters to improve communication and efficiency, a person familiar with the matter told TechCrunch.
“As we plan our next phase of growth, Sorare has decided to centralize some of our functions at our Paris headquarters,” Sorare co-founder and CEO Nicolas Julia told TechCrunch via email. “This primarily affects our product development team as we believe that bringing the team together in the same space in Paris will allow them to collaborate more effectively as they continue to build best-in-class products across our football, baseball and basketball products .”
Eleven other employees in the New York office have been asked to relocate to Paris, a person familiar with the matter said. Julia said the company will fill most of the laid-off positions in Paris and plans to hire more than 20 positions over the next six months.
Sorare is not closing its New York office. Julia said it will retain certain teams, such as those that work with U.S. clients or have U.S. brand partnerships with leagues like MLB and the NBA. Sorare’s partnerships with these sports leagues have been locked in for several years, a source added.
While a person familiar with the matter said these layoffs were not for financial reasons, the source did add that like many other web3 companies, Sorare is taking longer to achieve its growth goals than they initially thought. As TechCrunch previously reported, Sorare users can buy and sell NFT cards from other players on its platform, although Sorare primarily makes money by issuing and selling new cards. Sorare’s user transaction volume will reach $200 million by 2023, a person familiar with the matter said. The company declined to say whether it was profitable or what runway it had left.
Sorare has not raised capital since a $680 million Series B round in 2021 that valued the company at $4 billion. According to secondary data platforms, Sorare has not attracted much interest from local investors. To be fair, declining interest isn’t strictly a problem for Sorare. Web3 companies have largely fallen out of favor with investors. Startups in this category raised $7 billion in 2023, down 74% from $26 billion in 2022, according to Crunchbase. For context, total venture capital investment fell 38% during the same period, according to Crunchbase data.
Web3 companies focused on gaming have struggled to find meaningful traction. Last month, a video game-focused venture capitalist told TechCrunch that the market for Web 3 games was significantly smaller than some investors expected. This has become obvious.
Web3 gaming startup Mythical Games raised nearly $300 million in venture funding before undergoing three rounds of layoffs. Dapper Labs, another new startup in the category, has also undergone multiple rounds of layoffs.
That’s not to say Solare will suffer the same fate. The company has an active community of nearly 13,000 people on Reddit that regularly posts about fantasy games, as well as a community of third-party media dedicated to these contests. Hopefully even if the web3 winter continues, Sorare’s reorganization will be enough.
