New York-based Drone Racing League landed its most significant sponsorship agreement to date with cryptocurrency platform Algorand, the company said on Tuesday.
DRL is a first-person-view racing league where drone pilots race devices through neon-lit courses and compete for prize money. The company started in 2017 and is now valued at $200 million, according to PitchBook.
Terms of the agreement with Algorand were not made public, but people with knowledge of the deal told CNBC it’s a five-year pact worth $100 million. German-based financial services company Allianz held the title rights since DRL started, and will remain a league partner. Excel Sports Management negotiated the deal with Algorand.
DRL president Rachel Jacobson called the pact with Algorand “transformative” and the “perfect marriage.” She added the crypto platform, and DRL both cater to a “tech-setter” fan base.
Jacobson described the Generation Z audience as digital-savvy, early adopters “who care just as much about an Apple iPhone launch as they do about sports and entertainment,” she said. “When you look across what’s happening with crypto and blockchain, you have to make sure that you’re targeting the right audience.”
Based in Boston, Algorand has a blockchain, or digital ledger, and is traded on the cryptocurrency exchange under the ticker symbol ALGO. As crypto continues to evolve in the financial sector, companies are positioning to attract more digital consumers, using sports sponsorships to create awareness.
This year, crypto companies took over sports naming rights assets in the National Basketball Association, Major League Baseball, and one firm reached a $100 million deal with Liberty Media-owned Formula 1.
Jacobson, a former NBA executive, said sports help newer companies with brand awareness but added crypto firms will still need to educate younger audiences about the space and using engaging platforms to drive its message. DRL says it reaches roughly 75 million fans globally
“You need to build in the right programming so that it’s not just a logo slap,” Jacobson said. “The crypto community, they are too smart – they see through just a jersey patch or signage. They want to know, ‘How do I get involved? And how is this going to change my sports experience?’”
DRL starts its sixth season on Sept. 29. The league has media rights deals with NBCUniversal and a streaming deal with Twitter. Other sponsorships include agreements with DraftKings, T-Mobile, Bodyarmor, the U.S. Air Force. DRL helps the Air Force with recruitment and training of future drone drivers.
Drones used in racing events are designed and built by DRL, who build models for every race. The drones are worth roughly $2,000 and can travel up to 90 miles per hour.
The global drone market – described as the “Unmanned Aerial Vehicle” sector – is projected to reach $58 billion by 2026, by Markets and Markets. Hence, with DRL also functioning as a drone maker, Jacobson said it wants to leverage products to lure more revenue.
“There are infinite opportunities,” said Jacobson, noting more companies testing deliveries using drones. “We build our drones, and when we think about other lines of business, it could be anything. We’re just getting started.”
