A New York startup focused on drone racing has scored a multimillion-dollar sponsorship deal with cryptocurrency platform Algorand, a move that shines more visibility on both the tech-centric sports league and the crypto industry's growing role in sports marketing.
The deal, announced Tuesday, is worth $100 million over the next five years, officials with the Drone Racing League confirmed with CBS MoneyWatch. As part of the deal, the league will release tickets to racing events, so-called (NFT)and other fan collectibles on Algorand. Algorand will have naming rights to the drone league's championship series, according to the agreement.
The drone racing deal will "introduce millions of technology enthusiasts to the possibilities that blockchain can bring to racing and to sports as we know them today," Algorand's CEO Steve Kokinos said in a statement.
The marriage between Algorand and drone racing marks the latest example of matchups between the sporting world and crypto creators. Canadian blockchain company Dapper Labs became the official digital collectible marketplace for the NBA in 2019. Since then, the company has generated more than $200 million in sales, Forbes reported in February. Martial arts league UFC signed Crypto.com as its official NFT platform earlier this year for a reported $175 million.
The Drone Racing League was launched in 2015 by founder Nicholas Horbaczewski, a Harvard graduate and former film producer.
In drone racing, competitors follow a NASCAR-like model in which points are totaled at the end of a series of races in order to crown an overall winner. Each drone is outfitted with a different shade of neon coloring so that viewers can distinguish each racer. Races are streamed live on Twitter and broadcast from arenas in St. Paul, Minnesota, Memphis, Tennessee, and elsewhere. The league's sixth season starts September 29.
In addition to Algorand, the Drone Racing League has other sponsorship deals with T-Mobile and the U.S. Air Force. Earlier this year, the league announced DraftKings as its official sports betting platform.
The drone league also has significant financial backing. It raised $20 million in a funding round in 2017 that featured early investors WWE and Hearst. Touchdown Ventures took the lead in a $26 million funding round in 2019. Miami Dolphins owner and real estate mogul Stephen Ross was another early investor in the racing league.
With drone racing, "You don't have to love stick-and-ball sports and you don't have to fly drones" to fall in love with the sport, the league's CEO, Rachel Jacobson, said Tuesday. Fans tune in because they're fascinated by the elaborate courses racers must navigate and because they start to form a connection with the different drone pilots, she said.
The typical drone racing fan generally isn't the average gridiron or hoops fanatic, Jacobson told CBS MoneyWatch. The league most draws its audience from a 16- to 34-year-old crowd that loves tech, especially robotics and artificial intelligence, as well as gaming and devices, she said.
Jacobson, a former NBA executive, said 70% of the drone racing audience does not follow traditional sports, adding that "they don't care about how many touchdown passes Tom Brady has thrown."