To the digital collectible platforms making waves across the sporting firmament globally, add Rario, launched as the world’s first and foremost NFT (non-fungible token) business for cricket.
Simply put, Rario is a platform for cricket fans to collect and trade officially licensed cricket moments on the blockchain, represented as an NFT (non-fungible token).
ANKIT WADHWA explains how he, along with fellow co-founder Sunny Bhanot, is building Rario, an NFT business for cricket, as a second time entrepreneur.
Excerpts from a wide-ranging interaction:
If your platform is built on blockchain, are the transaction currency based, or cryptocurrency based?
It’s both, you can choose depending on your geography. So in India right now, cryptocurrencies are acceptable.
The benefit of blockchain technology that we are bringing, how we accept payments is completely dependent on local regulations in various parts of the world. We are serving a global cricket audience. A lot of our customers actually come from the United States from the United Kingdom from Australia, India is one of the top four countries right now, not number one. US is the number one right now. I’m very certain India will become number one sooner than later.
Talking in terms of market split. You have US as number one. Then?
So we have US, UK, Australia, India. In that order, as of today. Percentage wise I think a majority share 50% would be the US. The rest is split almost equally amongst the other three.
Again, it’s very early days of the industry.
Officially you have been there since last month right?
We started taking pre-orders in August, the first cards that we issued on the blockchain were on August 31st.
Who are your financial backers and what is the CapEx that has gone into setting up Rario?
We have some marquee backers. There are 14 people on our cap table, including our large multi-billion dollar funds Kingsway Capital and Presight Capital. Kingsway Capital is also the lead investor in Cars24 in India.
Kingsway is London based and Presight is West Coast (US) based. Kingsway has around four and a half billion dollars in assets under management. Presight, which has around two and a half billion dollars as assets under management, has been an investor in the blockchain space.
Then there is Polygon blockchain, which is a very valuable investor on our cap table. They provide the technology infrastructure that we use.
When we chose to use Polygon, they also reached out to us on making an investment in the company because they bought into the vision that we had presented as Rario.
And the capex that has gone into setting up Rario?
I’ll just complete the perspective on investment. There are more investors who have gone in actually, in an individual capacity, but they belong to large funds.
We also have the entire management team of Cars24. So the CEO and co-founders of Cars24 are, our investors And the CEO of now amongst the largest e-commerce companies in the middle east – noon.com – operated by Emaar, is also one of my investors. So there are 14 such people. Essentially all blue chip Marquee names, that have come together. Some of these names that you may have heard in India, some you may not, but the idea is these are big investors.
Returning to CapEx available, what has gone in early stage and what will roll out later?
We have not talked about it publicly in the seed round. When we do our next round, we will maybe talk about the numbers. I think the fundamental piece here is that capital is not a constraint for us.
What have you mapped out in terms of the investments in the short term for building your user engagement, marketing and those which is normally what is required to build your business?
It’s in the several millions of dollars every year in terms of technology development.
You asked about marketing, sourcing. We get it for our products by signing with cricketing organizations globally as well as cricketers?
For cricketing organizations you have Caribbean Premier League and Lanka Premier League. So you have one solid deal with CPL and you have a group of cricketers.
That’s it. These are the five cricketers who are signed with us right now. We have Zaheer Khan, Smriti Mandhana, Shafali Verma, Shakib Al Hasan (Bangladesh) and Faf du Plessis (South Africa)?
(A little before this interview was uploaded, Rario announced that it had added Team India cricketer and captain of the Indian Premier League franchise Delhi Capital to its talent roster)
So let’s talk about CPL. You had one season with it after your launch in August. What has been the response specifically that flowed out of the CPL as far as your NFTs are concerned?
So we’ve had two pack drops. So we launched the NFTs as pack drops where you buy a pack full of what we call cards, these cards that essentially digital cards very similar to Topps exactly.
Topps has also gone into digital now
They have, and they have seen some very good success with their MLB Topps card as well.
Trading cards is what you have essentially? Coming out of CPL what has it been like?
What we were anticipating to sell in 14 days and our first drop we sold in two and a half days. Our marketing activities were supposed to start on day three. And by the time we got to starting marketing there was nothing to sell. So clearly there was adequate demand actually than what we had predicted demand for the product.
What you get at Rario are trading cards. The trading cards are in four categories. There is a unique tier trading card, which is essentially, there is only one card that is created. So there are no copies of it. Then there’s then the next three tiers are similar to credit card tiers. You have a black tier, gold, silver tier.
In a black tier, you will typically have two digit numbers of equivalent cards. So if one card is there that might have 20 to 50 copies. In case of a gold tier, you would typically have three digit number of copies of 200 to 500 in typical cases. And then silver card we have around 2000 copies.
These cards are bundled together in packs of three different categories. There is one pack which has one black card and other card, and there’s a pack which has one gold card and another card. And then there is a package that has only silver cards.
They are priced in dollars for a global audience. The top tier pack is $500, the mid-tier pack which has one gold card in, is a $50. And the one that has only silver cards in it is $10 where the $10 pack becomes a fun pack to own is because they in 10% of the cases you get a gold card as well.
So this is also similar to what Topps has done traditionally with the trading cards that you would buy in packs and we have brought this to the digital space.
Interestingly the $500 packs sold out in less than 20 minutes. We had a hundred units of those. The $50 packs, which we had 500, of sold out in three to four hours. And the $10 packs, which we had 10,000 units on our platform, took about 2-2.5 days to sell out.
How are these digital trading cards selected, created?
If you see our YouTube channel, you will see that every moment that we had identified. So, the moments that go on a card are identified by a certain algorithm, which we have developed, we are calling that algorithm, “ClipRank”. Essentially what that algorithm does is for every ball that is bowled, 30 data points are collected on various parameters of the ball and the shot. In addition to those 30 parameters, we collect text commentary against every ball. We also collect social media chatter and buzz for the entire tournament which helps in taking an input. At the end of the match, we get a prioritized list which basically says rank number one, rank number two clip from this match. This helps us identify, which are the most valuable clips quickly. Of course we are in early days, so we will supply that human layer on top of this, where someone validates the numbers and then say that, okay, here are the moments that we should mint as cards because these seem to be very, very exciting and valuable.
There is not just analytics behind it, but also language. So, when you look at our trading cards, there and badges with stars. Those badges with stars are essentially our way of defining how valuable the card is. So for example, it could be a powerhit 3 star or a powerhit 2 star. If it’s a massive six that someone has hit, it will be a powerhit three star. And, those sort of seven or nine badges, you could practically think of this as a language of, you know, how you could talk about your card versus mine. And you would say, Hey, I got a powerhit 3 star, that’s amazing. And I’d say, you know, look what I, you know, I got a GOAT three star, which is the more recent language around saying “God of all things”. Right. and that’s a very exciting card to own. So, it’s not just the quality of the moment, which you can visually see, but there is a language and there is an analytics engine behind this, which leads to all of this.
How do you get access, to, in this case, the CPL archive?
Our partnerships gives us access to these archives. So, we have access to CPL archive. Right now, we have access to Sri Lanka Premier League archive and as more partnerships get signed, they will all feed into the same engine for us. What we have built is a generic engine. We are in the process of having conversations with several international boards at an advanced stage as well. RFPs (Request for proposal) are out, we have responded, we’ve been shortlisted. When that gets completed, we will talk about it.
On a related note, is IPL monetizing the NFTS or have they sold the rights?
IPL is not yet with anybody. Those are independent rights, which the IP holders, in this case, BCCI, would do a separate deal. Likewise with CPL, English cricket board, Australian, New Zealand cricket.
For content owners, IP owners, this is a new monetization that is happening.
In terms of NFTs, which are cricket boards, which have sold the NFT rights?
None of the cricket boards have yet.
Except Lanka and West Indies?
These are the leagues. So boards have their own national teams.
From the T20 leagues only CPL and LPL?
As of now there are four leagues internationally that have gone for partnerships. We have signed all four. Abu Dhabi T10 is also with us.
The fourth one, we’ve agreed not to talk about the name just yet. As soon as that happens, then we will.
Essentially we are signing whatever we can. The boards have not yet started. There are RFPs that are out, that we have responded to. There are short lists that have been done and now further presentations are happening. I think in a few months you will start hearing various board announcements as well.
Okay. So, you said that post the launch, the major tournament that you just covered was CPL, right?
Yes. I would say it has definitely delivered more than what we had planned by a significant margin.
Can you put a number on this?
It comes to around $200,000 in total sales, so far from CPL. So far. And there is more to come.
So how do you monetize once the tournament is over?
There are two parts of this. Our first drop was not even based on this year’s CPL. It was based on the last seven or eight years of archives.
The second round was taken was from this tournament and therefore the first drop was larger and second was smaller as well, because it will only from the first half of the tournament. We also have another drop from the second half and also the overall best moments, et cetera. And we have more from the archives, we haven’t taken out.
We haven’t used everything. We know the market is also growing. I think we will grow with the market and the market will grow with us. That relationship has just started. And it’s looking positive.
And honestly, it’s not necessarily related to the timeframe of when CPL happens. Some of this will come out at different points of time in the year. Contrary to how a broadcaster will look at the same intellectual property, for an NFT player like us, historical archives are significantly more relevant. Whereas in case of broadcast, you would typically see highlights of old matches. Which are not as relevant as the current live matches. So it’s because of the emotional connection.
Speaking of emotional connect, the big memorable moments or legendary moments, from a career perspective would be Zaheer Khan. Because he has been India’s best left-arm fast bowler and an interesting personality. So, you have yet to start this with the cricketers?
No, we haven’t. We launched with CPL.
With cricketers, what elements are there? Because most of the great moments would be with the either the broadcaster or with a photo agency or with the BCCI. There are no relationships that have been built or no contractual arrangements that protect player rights in terms of how they can monetize their own IPO. So pretty much the players play, Zaheer Khan’s career is over and everything that he has done archivally is pretty much sitting with the BCCI or Star or Sony. So what is there available for you to monetize?
Let’s talk about the other two as well. Shakib and Faf. Both are participants in CPL as well. Actually, the interplay becomes exciting for us of working with tournament organizers, therefore IP owners, as well as cricketers as what we can create in terms of memorable, valuable trading card, digital trading cards in this case are the cards that are endorsed by the same player. So, in these cases, I mean, you know, their best moments you could in a way say autographed by the player himself is possible on our platform, because we are partnering with both sides of the spectrum.
Let’s assume you have no access to any archival footage. So, is he just a brand ambassador? How could you use him / her?
There are dimensions on both sides. There are dimensions on the cricketing career, which for any cricketer are the most important, and then there are dimensions of a cricketer’s fandom, which is within his control. And those options also become very viable for Zak to launch in partnership with us. So for example, if a particular cricketer let’s say is a great singer you may have you know, some, some aspects of what you could call personal life of you know, your idols and your cricketers becoming available as limited edition NFTs. That’s one way of looking at it. Another way of looking at it, as, you know, you could have you know, cricketers speaking their mind out, which otherwise they may not have talked about on certain sort of great moments that they had.
Every cricketer has a perspective on what they were thinking of at that time and how that moment was relevant, how the team was performing. So it’s sort of a behind the scenes interview which would come from a cricketer. There are other ideas on recreating, certain moments where you may not have IP, but you can recreate the scenario depending on who the cricketer is.
So there are several things that are possible. We are at very early days of a technology, where use cases are being defined. I think the possibilities extend in all directions right now.
One of the possibilities that you actually will see with Rario coming in 2022 is that all the cards that people are buying are not just trading cards, similar to Topps when you collect. They are like trump cards where you can play with each other. So you bring your trump cards and I bring my cards and we can battle it out for victory. And normally that would be a fun engaging. So we are calling it the Rario club. So, you know, if you own one of our NFTs, that is essentially a ticket for you to enter the Rario club.
Rario club is nothing but a massive cricket fans engagement spot with different kinds of activities would be possible. So for example, a trump card game may be possible, or alternatively, even something like, you could participate in a player quiz. There will be rewards associated with it, how those rewards play out is something that we are in the process of deciding. So here again, these use cases, everything on how a player’s card is more relevant, or how is that tournament’s card more relevant.
All of those things play out in different forms. And to be honest, if we have the conversation again, after six months, then maybe five more use cases that would have been discovered by then.
So I think we are in those early stages where we are still figuring out how the technology is going to mature. Sure there are some great ideas we have and we’re moving towards those variables. But you know, our thinking will evolve and new ideas will be shown to us by others as well, as much as we are showing new ideas for the rest of the world.
Actually for the first time, if you see from an Indian perspective that you will be seeing a digital startup come out of India, which is practically at the same level of evolution as compared to its global peers. There are a few people who may be a few months ahead of us, but not much. They’re also figuring things out. We are also figuring things out. We did not have a playbook or a template that we’ve brought to India. We are creating the playbook. Others are creating a playbook. I think we are all looking at each other for great ideas as well.
As you mentioned it’s very early days. You will be looking at and leveraging opportunities. And how creative you are sitting from where you are, would also define what avenues there are for monetizing and engagement. What is the future prediction as far as cricket NFTs globally are concerned?
I think the important number here is not what is going to happen. Of course it is valuable to have some foresight and projection, but the important number here is that if you look at the first six months of this year, around $2.5 billion worth of NFTs have already been sold.
If you look at the NBA Top Shot, in their first month, they did about $44 million worth of sales. That was an initial spike. Even right now, every month they’re doing about $22 million in sales.
If you look at a similar landscape for Sorare, which is looking at football, based out of Paris, you are looking at them projecting around $6 to $7 million worth of sales every month.
So what’s very interesting is that something that did not exist or did exist on paper as trading cards earlier, have suddenly become very, very large. If you look at the number of orders that NBA Top Shot have been doing is around 40 to 50,000 a day.
I’ve been in the e-commerce industry for a very long time before this. This is the sort of the number that you would have expected with an e-commerce player after two to three years and not two to three months.
I think what’s really happening here is that our digital identities have become very important and our sporting identities were always very important for us. And the two worlds are increasingly colliding and you know, as that collision happens, new businesses like the ones that we are building come to life. And, it’s really how close you are on to that collision or how much the collision has already happened that would define the scale.
What I can tell you is from a reasonably long-term standpoint, this is definitely a very big business. Now, the question is that whether the inflection would happen in three months or six months or nine months or one year or one and a half years, we don’t know right now, we are building. A part of the thrill of the businesses and building in that manner where you’re innovating and you’re at the forefront then you are basically taking your users along with you on a journey. And you know, some core group of early adopters are coming with you sooner and others will follow much later. I don’t have answers on when the numbers will explode.
Looks like they are already exploding in football and basketball.
They have, I think the early adopter group is very, very excited.
Now my big question is on the larger cricket base. I think it is a step-wise journey and the larger fan base will also find this very exciting, whether that happens in three months, six months. We are just watching and you know, why they will find it exciting because when you think about the cards that we have, these cards are not consumption expenditure, these are essentially assets that you’re buying that you own. So from an Indian or a south Asian mindset standpoint, even if it does cost 500 rupees or a 1000 rupees, it is not 1000 rupees that you’ve spent on a movie today. This 1000 rupees, has an archival value. It has a value, whether the value goes up or down, I am not one to say, because you know, that depends on who the next person is, who wants to buy this. But there is a permanence to the value. So that’s one dimension, which is very exciting and being tested for the first time that, you know, can I get people to follow their fandom by spending money, not as consumption, but as a sort of an asset purchase. And I think that jives very well with south Asian mindset of being value conscious.
Second thing is, if you think about the larger Indian or south Asian fan base. I mean, if I look at the cook in the apartment that I live in or the guard who was there in the society, he won’t understand price earnings ratios, but he’ll definitely understand if Virat Kohli is doing well or if Rishabh Pant is going to be great. He’ll probably understand that for a lot of international cricketers as well. So if you ask me from a macro standpoint, there are a lot of drivers that make us very confident that there will be a big explosion.
There’s a tiny explosion that has happened already, so there are numbers which are bigger than expected, but I think a much larger explosion, like hundreds of millions of people is very feasible and very possible. It’s a question of how we take our consumers and users through that journey.
I mean in 2011-12, even cryptocurrencies were not very well understood by most. Today, we have around 12 million active wallets in our country that people have cryptocurrency in them.
I think that’s the big vision. The big vision of this fandom has not been utilised.
Internationally, there’s 30 to 40% of money in any sport that is direct revenue for the sport. And that comes with fans spending money on the sport. And not because marketing companies are spending money or sponsorships coming in. This 30 to 40% has not happened in cricket despite many companies trying for several years.
We believe we have the ability to leapfrog, what has not worked by being in the digital space, by providing these assets in a very interesting way, where it is not consumption, it is more of an asset and an investment. It’s also fun because there’s a club aspect to it. And it is very relatable and there is a dimension of something that you own, that you can trade it with somebody else. So putting all of that together it is replicating what trading cards have done in the US with physical cards, but we think that could be the next big thing.
The engagement potentially at many levels as technology advances, everything is a completely different ball game, is it not?
Possibilities are infinite. We’ll keep building towards the most exciting ones that we have identified. Maybe in three months, we will identify two more exciting opportunities because it’s so new. And I guess at that point of time, I’ll have even more interesting stories to share on why those have been selected, what happened with the last set of numbers, how we discovered that here is a direction that makes sense. Understanding your profile a little bit from the conversation we had, I think you would find that fascinating to understand, you know, ‘tell me these numbers happened, and therefore this happened and therefore you’ve chosen X or Y’.
What I can tell you is we have the firepower, we have great investors, we have a great team. We have what we believe is a great idea. And you know, my principal for a very long time has been that to build a great business, these are the three pillars pillars you need. You need a great business idea, you need a very strong team and you need capital.
You need a war chest to fight.
A war chest and an ability to go conquer and win any battle. That’s what we have organized in this venture. That’s what we have used to also execute and also start our proof of concepts. CPL’s first prediction is in a way our proof of concept. As more and more partnerships are announced by us, they will also benefit from the CPL learnings.
Because as much as you can say that there are other players in the world doing something similar, when you look at your own numbers, how consumers are reacting, what they’re liking, what they’re not, what they’re talking about. We have a thriving community of consumers on our discord channel and on our telegram channels. And they give us so much feedback. They tell us what they are liking about the cards and, we listen very actively. Both me and my co-founders are literally in our communities all day. We are never sitting in this ivory tower far away. Because we are innovating, we are figuring out new businesses. We need to literally have our ears to the ground. Now I’m getting into the storytelling zone. I will pause. But you get the picture.