In response to the evolving dynamics of the web3 gaming landscape, Sorare, the NFT fantasy sports startup, has made strategic adjustments to its staffing, reducing its New York team by 13%. This move, while not signaling a complete closure of the New York office, aims to streamline operations and enhance efficiency.

Nicolas Julia, Sorare's co-founder and CEO, clarified the rationale behind the decision, explaining: "As we plan for our next stage of growth, Sorare has decided to centralize some of our functions at our Paris HQ." The primary focus is on the product development team, with the belief that a consolidated space in Paris will foster more effective collaboration across football, baseball, and basketball offerings.

Details on Staff Cuts

The staff reduction affected 22 employees in the New York office, with an additional 11 asked to relocate to Paris. It's important to note that Sorare remains committed to its U.S. operations, retaining teams responsible for serving U.S. customers and managing brand partnerships with major sports leagues such as MLB and NBA.

Contrary to speculation, insiders assert that the layoffs were not driven by financial constraints but aligned with Sorare's strategic goals. Like many web3 companies, Sorare acknowledges a longer-than-anticipated time horizon for achieving growth targets.

Revenue and Funding

Sorare's revenue model involves user transactions of NFT cards on its platform, with additional income generated by issuing and selling new cards. In 2023, the company recorded $200 million in user transaction volume, though details about its profitability and financial runway remain undisclosed.

Sorare's last capital injection was a substantial $680 million Series B round in 2021, valuing the company at $4 billion. Recent data from the Game 7 Research Report, however, suggests a waning interest from investors, reflecting broader trends in the web3 sector. Blockchain gaming companies faced a 74% drop in funding in 2023, indicative of a decline in investor enthusiasm compared to the previous year.

Final Thoughts

Other web3 gaming startups, including Mythical Games and Dapper Labs, have also recently encountered challenges, with layoffs becoming a recurring theme. Despite these industry-wide struggles, Sorare maintains an active community, boasting nearly 13,000 Reddit members engaged in discussions about the fantasy games. While uncertainties persist within the web3 landscape, Sorare's strategic reorganization aims to weather the storm and position the company for sustained success.