Drone Racing League lands $ 100 million deal with cryptographic platform Algorand

New York-based Drone Racing League has landed its most significant sponsorship deal to date with the cryptocurrency platform Algorand, the company said Tuesday.

DRL is a first-class racing league where drone pilots run devices through neon-lit courses and compete for prizes. The company started in 2017 and is now valued at $ 200 million, according to PitchBook.

The terms of the agreement with Algorand have not been released, but people familiar with the matter told CNBC that it is a five-year deal worth $ 100 million. The German financial services company Allianz has held the title rights since DRL began, and will remain a legal partner. Excel Sports Management has negotiated the agreement with Algorand.

In an interview with CNBC last week, DRL president Rachel Jacobson called the pact with Algorand a “transformer” and a “perfect marriage.” He added the cryptographic platform, and DRL both responded to a “tech-setter” fan base.

Jacobson described the Generation Z audience as the first digital device that had “as much priority as launching Apple’s iPhone as a sports and entertainment device,” he said. “When you look through what happens with crypto and blockchain, you have to make sure you’re targeting the right audience.”

Based in Boston, Algorand has a blockchain, or digital wallet, and is traded on the cryptocurrency exchange under the ticker symbol ALGO. As crypto continues to evolve in the financial sector, companies are poised to attract more digital consumers by using sports sponsorships to create awareness.

This year, cryptocurrency companies have taken over the sports naming rights assets in the National Basketball Association, Major League Baseball, and one company has reached a $ 100 million deal with Formula 1 Liberty Media .

Jacobson, a former NBA executive, said the sport helps newer companies with brand knowledge, but added cryptographic companies that still need to educate younger audiences about the space and use challenging platforms to drive it. his message. DRL says it reaches about 75 million fans worldwide

“You need to build in the right programming so that it’s not just a logo slap,” Jacobson said. “The cryptographic community, they’re too smart – they just see a patch of mesh or signage. They want to know, ‘How can I intervene?’ And how will this change my sporting experience? “

DRL begins its sixth season on September 29th. The league has dealt with media rights with NBCUniversal and a streaming deal with Twitter. Other sponsorships include agreements with DraftKings, T-Mobile, Bodyarmor, and US Air Force. DRL assists the Air Force with the recruitment and training of future drone drivers.

The drones used in racing events are designed and built by DRL, which builds models for each race. The drones cost about $ 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 in 2026, from Markets and Markets. So, with DRL also working as a drone manufacturer, Jacobson said he wants to leverage the products to attract more revenue.

“There are a myriad of opportunities,” Jacobson said, noting that more companies are testing deliveries with drones. “We build our drones, and when we think about other lines of activity, it could be anything. We’ve just started.”

Disclosure: NBCUniversal is the parent company of CNBC.