The importance of trend spotting

In the investment space, trendspotting, the process of predicting trends before they enter the mainstream, is crucial and can separate successful investors from those who consistently pick duds.

An example of superior trendspotting was seen in the case of the investment by Possible Ventures in Sorare, a fantasy football game, where players buy, sell, trade, and manage a virtual team online. The difference between Sorare and other fantasy football card games is that the cards are minted non-fungible tokens (NFTs).

In 2019, even though Sorare had not moved past their minimum viable product (MVP) stage and had no product, Possible Ventures took the plunge and invested $100,000 in Sorare at a $2 million valuation.

Possible Ventures spotted two growing trends: (1) Fantasy Football — Sports fans love putting together fantasy teams and collecting cards of their favourite players; (2) NFTs — Similar to owning an original piece of artwork, people collect NFTs to show they own original digital content. Possible Ventures chose the two trends well, and as NFT’s exploded in 2021, so did Sorare!

In just two years, Sorare went from having no product to 600,000 users and $150 million in sales across the first half of 2021. They raised $680m in a Series B round at a $4.3 billion valuation — giving Possible Ventures a 2200x return in just 28 months!

Now valued at over $4.3 billion, Sorare has Lionel Messi, Kylian Mbappe and Serena Williams as Investors and in January 2023, it signed a partnership with the English Premier League for the purchase and use of the official Premier League-licensed NFTs. Phenomenal growth!

I daresay if you can spot trends in any sector, you will always be ahead of the game.