The Drone Racing League signs a $100 million partnership with cryptocurrency exchange Algorand

The Drone Racing League, based in New York, announced Tuesday that it had signed its most major sponsorship deal to date with cryptocurrency platform Algorand.

DRL is a first-person-view racing league in which drone pilots compete for prise money by racing their gadgets around neon-lit courses. According to PitchBook, the company began operations in 2017 and is now valued at $200 million.

The terms of the agreement with Algorand were not disclosed, but sources familiar with the matter told CNBC that it is a five-year deal worth $100 million. Since the DRL's inception, Allianz, a German financial services corporation, has held the title rights and will continue to be a league partner. Algorand's deal was handled by Excel Sports Management.

DRL president Rachel Jacobson described the agreement with Algorand as "transformative" and the "ideal marriage" in a recent interview with CNBC. She stated that both the cryptocurrency platform and DRL had a “tech-setter” fan base.

Jacobson described Generation Z as tech-savvy early adopters "who care as much about an Apple iPhone launch as they do about sports and entertainment." “When examining what is happening in the world of crypto and blockchain, it is critical to ensure that you are addressing the appropriate audience.”

Algorand, headquartered in Boston, operates on a blockchain, or distributed ledger, and is traded on cryptocurrency exchanges under the ticker name ALGO. As cryptocurrency continues to evolve in the financial sector, businesses are positioning themselves to attract more digital consumers through the use of sports sponsorships.

This year, cryptocurrency companies acquired sports naming rights assets in the National Basketball Association and Major League Baseball, and one firm struck a $100 million contract with Liberty Media's Formula 1 team.

Jacobson, a former NBA executive, noted that while sports help newer businesses build brand awareness, crypto firms will still need to educate younger consumers about the area and use engaging platforms to spread the word. According to DRL, it has approximately 75 million global fans.

“You need to incorporate the appropriate code to ensure that it is not merely a logo slap,” Jacobson explained. “The crypto community is far too astute — they see right through a shirt patch or a piece of signage. They're curious as to how they may get involved. And how will this affect my sporting experience?'"

The sixth season of DRL begins on Sept. 29. The league has agreements with NBCUniversal and Twitter for media rights and streaming. Among the additional sponsorships are partnerships with DraftKings, T-Mobile, Bodyarmor, and the United States Air Force. DRL assists the Air Force in recruiting and educating future drone pilots.

DRL designs and builds the drones used in racing events, creating models for each race. The drones cost about $2,000 and have a top speed of 90 miles per hour.

According to Markets and Markets, the worldwide drone industry – also known as the "Unmanned Aerial Vehicle" sector – is expected to reach $58 billion by 2026. As a result of DRL's dual role as a drone manufacturer, Jacobson stated that the company wishes to leverage goods in order to increase income.

“There are limitless opportunities,” Jacobson said, noting that more corporations are experimenting with drone deliveries. “We manufacture our drones, and when we consider new lines of business, anything is possible. We've only begun.”

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