Traditionally European football focused, Blockchain sports venture Chiliz, has announced that they have plans to invest $50 million in an expansion to the United States.
They plan to expand in to the five major US sports leagues. Outside of the US they are also in talks with Formula One and e-sports teams.
Chiliz is a Malta based Blockchain company that was created with a focus on European sports. The website offers tokens to fans which allow them to vote in a series of polls and receive special promotions and rewards. They call this service “a new digital revenue stream” and they offer it to sports organisations who want to expand their fanbases to the global level.
The fan tokens that Chiliz use are listed on one of the biggest cryptocurrency exchanges in the world, Binance. The last sports club to list their tokens on the exchange was the Serie A club AC Milan. They generated $6 million of revenue in the first thirty minutes.
Comments about the expansion
Speaking to Reuters about their plans for US expansion, Alexandre Dreyfus, their chief executive said:
“A huge focal point for us in our global growth plans is the U.S… That’s why we’re opening a New York office and investing $50 million into the country’s sports industry in order to launch Fan Tokens with leading franchises from the five major U.S. sports leagues.”
“We head to the U.S. with a proven track record in generating millions of dollars of revenue for some of Europe’s biggest sporting organisations. In 2020, we shared more than $30 million with our partners, but this year we’re targeting a minimum of $60 million.”
The popularity of fan tokens
Fan tokens are a remarkably popular product, especially if they are linked to major sports clubs. Chiliz is one of the many companies that have seized on this opportunity and as such, they have surpassed $1 billion in market capitalization.
In an official announcement from the company, Chiliz said:
“Fan Tokens generated $30M USD in revenue for clubs and partners in 2020, creating a new digital revenue stream and helping sporting organisations overcome the impact of the pandemic. The Fan Token Market cap currently stands at $194M. Many more leading organisations from sports, esports, and entertainment are primed to launch Fan Tokens in 2021.”
The next move for Chiliz
They are well placed to take advantage of the growing demand for online and specifically Blockchain-based sports betting and sports engagement. Now that fans all around the world are having a much harder time physically interacting with their organisations or attending in-person events, they are in need of a way to materially show their support.
Not only do fans local to the sports clubs have a chance to show their support during the pandemic, but it is also a great way for clubs with a more global audience to engage with the 99% of fans that aren’t able to watch games from the stadium. Chiliz is currently the 62nd most valuable cryptocurrency in the world but I could see their popularity grow even more as they expand across the globe.