Solare hasn't completely closed its New York office, but is moving more employees to Paris
Sorare, a Web3-enabled fantasy sports platform, laid off 22 employees based in its New York office in February. The move, sources told TechCrunch, comes as the startup wants to centralize certain teams in its Paris headquarters to improve communication and efficiency.
“As we plan our next phase of growth, Solare has decided to centralize some functions in our Paris headquarters,” Solare co-founder and CEO Nicolas Giulia told TechCrunch via email. “This primarily impacts our product development team, as by bringing that team together in the same space in Paris, we continue to develop best-in-class products across our soccer, baseball and basketball products. We believe we can work together more effectively within the organization.”
An additional 11 employees from the New York office have been asked to relocate to Paris, sources said. The company plans to fill most of the laid-off positions in Paris and hire more than 20 positions over the next six months, Julia said.
Solare will not close its New York office. Julia said the company plans to retain certain teams, including those that are affiliated with U.S. customers or have U.S. brand partnerships with leagues such as MLB and NBA. Solare's partnership with these sports leagues has been fixed for several years, the official added.
People familiar with the matter said the layoffs were not for financial reasons, but like many other Web3 companies, it remains unclear how long it will take for Solare to reach its growth goals. As for how long it will take, the person added that it will take longer than originally thought. As TechCrunch previously reported, Sorare's users can buy and sell NFT cards from other players on the platform, but Sorare primarily makes money from issuing and selling new cards. Solare's user transaction volume is expected to reach $200 million in 2023, according to people familiar with the situation. The company did not say whether it would be profitable or what kind of runway it would leave behind.
Solare has not raised capital since raising a $680 million Series B round in 2021, valuing the company at $4 billion. According to secondary data platforms, Solare has not attracted much interest from local investors. To be fair, the drop in interest isn't exactly a problem for Solare. 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 data. For context, overall venture funding has fallen 38% over the same period, according to data from Crunchbase.
Web3 companies focused on gaming have struggled to find meaningful traction. Last month, video game-focused VCs told TechCrunch that the market for Web3 games turned out to be much smaller than some investors had expected. This has become clear.
Web3 gaming startup Mythical Games raised about $300 million in venture funding before going through three layoffs. Dapper Labs, another startup in this category, has also made a number of layoffs.
That doesn't mean Sorare will suffer the same fate. The company has an active community of about 13,000 people on Reddit who regularly post about fantasy games, as well as a third-party media community dedicated to these contests. Hopefully, even if the web3 winter continues, the reorganization of Sorare will be enough.