Professional sports teams used to get by on image and skills to attract money and fans but that’s not enough anymore.
These days, teams have no other option but to go digital, said Volodymyr Liulka, the founder of Ukrainian-Switzerland sport-tech startup Blocksport.
“Traditional sports business won’t avoid digitalization — it is ‘do or die’ for them,” he said.
A lifelong sports enthusiast, Liulka founded Blocksport, a startup developing mobile apps for teams to find and attract sponsors, sell merchandise or collect data about their fans.
The global sports industry lost money during the quarantine as stadiums closed and the pandemic restrictions suspended many games.
The international football industry, for example, lost around $14 billion during the coronavirus crisis, according to the non-profit organization FIFA.
According to Liulka, technology will help teams recover and attract sponsors who are now willing to place ads online rather than on players’ T-shirts.
Investors also have high expectations of the sports tech market: in the first half of 2021, they sank $5 billion into the sports tech businesses and predict that these businesses will attract $30 billion by 2024.
Blocksport counts 20 esports businesses and seven traditional sports teams among its clients, including Ukraine’s most famous football club Dynamo Kyiv, Serbian rugby club Red Star, Swiss volleyball club Volero Le Cannet and cycling leagues in Belgium and African countries.
According to Liulka, every fan who uses the app brings sports teams at least one dollar every month. “So, if Dynamo attracts $50,000 a month, it could earn over half a million a year,” he said.
Such apps are popular among esports enthusiasts who watch games and buy merchandise with their phones.
But traditional sports like football and basketball also need them if they want to attract sponsors and young fans, aged 15-35, “who spend most of their free time staring at the smartphone,” according to Liulka.
The subscription to Blocksport’s service costs between 400-1,500 euros a month. Apart from mobile apps, Blocksport helps teams create tokens, their digital currency.
Now startup wants to enter another profitable field — the buzzy market for non-fungible tokens or NFT that surged from nearly $14 million in the first half of 2020 to $2.5 billion in 2021.
NFTs are the blockchain tokens that represent a unique digital item like a card with the image of a sports player, a photo or a video clip.
Non-fungible tokens are usually popular in the art industry but sports enthusiasts are also willing to buy and sell them.
For example, a digital card featuring one of the world’s best football players, Cristiano Ronaldo, was sold as an NFT in March for $290,000. Eight never-before-seen photos of basketball icon Kobe Bryant were auctioned off nearly $10,000 each.
NFT is an additional source of revenue for professional teams but they don’t know how to work with the technology, Liulka said.
That is why Blocksport plans to launch a platform where users can create, trade and buy NFTs. Users will keep 90% of their profit and a 10% commission will go to Blocksport.
Liulka told the Kyiv Post that he’s discussing the launch of NFT with Ukraine’s former football manager Andriy Shevchenko and star tennis player Elina Svitolina.
Blocksport attracted $900,000 in September 2021: $500,000 came from the Chinese venture capital firm Panda Capital, the U.S. fund Aves Lair, Switzerland’s CV VC, and smaller investors, while $400,000 came from token sales.
The company has attracted $1.2 million in investments since it was founded in 2019. It has yet to turn a profit but Liulka believes that day is coming soon.
Part of Blocksport’s team works in Ukraine, but the company’s headquarters are in Zug, Switzerland’s ‘Crypto Valley’ known for having one of the best legislation for cryptocurrency users.
“We’ve chosen the safest and most convenient country to start a business and attract investors,” Liulka said.
But he continues working with Ukrainian teams like Dynamo and Metalist 1925 to support association football in Ukraine.
“We have Swiss quality and Ukrainian passion,” Liulka said.
