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Home Feature news The Brothers Gharegozlou: Vancouver siblings behind NBA Top Shot phenomenon are just...

The Brothers Gharegozlou: Vancouver siblings behind NBA Top Shot phenomenon are just getting started

This week Dapper Labs announced NFL digital collectibles coup — stay tuned, hockey fans

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Somewhere, perhaps nestled deep in a landfill on the outskirts of Paris or maybe gathering dust in the back of a closet in Vancouver, is a blue binder full of Pokémon cards.

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The cards were purchased, loved and meticulously organized, once upon a time, by a little boy named Sam Gharegozlou, whose Iranian expat family lived in France, but who travelled widely, including to the United States, where Sam was given pocket change to blow on his Pokémon habit.

Sam’s older brother, Roham, had a collection of his own, although his objects of desire centred upon a fantasy card game full of wizards and orcs, while their kid sister, Roxana, gravitated to Beanie Babies.

The Gharegozlou family eventually moved to Vancouver and, alas, Sam’s blue binder went missing, an unsolved mystery its now 33-year-old owner has a working theory about.

“My parents swear they didn’t throw it out, but I don’t believe them,” he said from his home office on the 21st floor of a building near the Vancouver waterfront.

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Older brother Roham resides in the same building, six floors above. Their mother, Gita, lives a few blocks away. Roham was able to hold onto his fantasy card collection, as both siblings held fast to an understanding of what it meant to be a collector.

That is, the passion, time, energy and not-always-rational sums of money people are often willing to part with in pursuit of the things they wish to possess.

For example, someone spent US$230,023 on a digital National Basketball Association highlight of Lebron James throwing down a ferocious dunk during the 2020 league final on the NBA Top Shot marketplace.

For those not up to speed: NBA Top Shot is a blockchain-based platform where fans (and speculators) can buy, sell and trade officially licensed NBA highlights, paying by either credit card or cryptocurrency.

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NBA Top Shot is a blockchain-based platform where fans (and speculators) can buy, sell and trade officially licensed NBA highlights, paying by either credit card or cryptocurrency. Photo by Dapper Labs via Reuters

It is also a partnership between the NBA, the NBA players’ union and Dapper Labs Inc., a Vancouver-based company that has the Gharegozlou brothers’ fingerprints all over it.

Dapper Labs this week announced its latest digital collectibles coup by partnering with the National Football League and its players, following previously announced partnerships with Spain’s premier soccer league and Ultimate Fighting Championship (UFC), a drumbeat of deals that positions a plucky West Coast company at the leading edge of a red hot new industry for collectors, investors, fans and professional athletes.

Roham is chief executive, Sam is a board member, and the sky, apparently, is the limit, as the company has been valued at US$7.6 billion and counts the greatest basketball player ever, Michael Jordan, among its investors.

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NBA Top Shot alone has transacted almost US$800 million amid a frenzied global collectibles market — virtual and physical — that the touts/analysts at MejoresApuestas (English translation, “top bets”) project will be worth US$522 billion by 2028.

It’s not just about sports. Non-fungible tokens (NFTs), the official name for a unit of blockchain data that certifies a digital asset — be it a jaw-dropping dunk, song, patent or a piece of art, film, fashion, porn, you name it — are unique and could, no hyperbole intended, represent the future of commerce.

In other words, there is a pile of money to be made, and more professional sports leagues (hello, National Hockey League?) for the Gharegozlou brothers to enlist.

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Along with the National Football League, Dapper Labs also has partnerships with with Spain’s premier soccer league and Ultimate Fighting Championship (UFC).
Along with the National Football League, Dapper Labs also has partnerships with with Spain’s premier soccer league and Ultimate Fighting Championship (UFC). Photo by Dapper Labs via Reuters

If you’re wondering who the heck these two young upstarts are and how they got the NBA, NFL and others on board, you are not alone. We here at the Financial Post have been wondering the same thing since mid-February, when an initial request for an interview with the siblings was submitted.

Hiccups, cancellations and crowded schedules ensued, until a Tuesday afternoon in late September when a bearded, impeccably polite, naturally introverted, smart — and confessional — Sam Gharegozlou appeared on a Zoom call from Vancouver and offered, apologetically, that he had limited experience speaking to journalists and had never spoken to a national publication.

It is Roham, the extrovert, who shows up at tech conferences, does the Ted-X thing and is invariably the brother quoted in press releases announcing Dapper Labs’ latest success. Roham is the talker, the “salesman,” Sam said.

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Among the first deals Roham ever closed was convincing Sam to forget about law school and the career in politics he had always imagined for himself, and go into business with him almost a decade ago.

“Roham was like, ‘Dude, you are here, Vancouver is an amazing place, there are awesome people, and I have connections down in Silicon Valley, and I know a lot of people there, and so, like, let’s do something together, because what was the worst that could happen?’”

Roham, a Stanford University biological sciences/economics grad, was working as a venture-capitalist associate in the San Francisco Bay area, watching startups packed with brilliant folks emerge, get a bit of funding, but then fail to gain traction and disband, scattering their talent to the winds.

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What the brothers aspired to do in forming their tech incubator/venture firm, Axiom Zen (the official corporate name is Launch Labs Inc.), in 2012 was to attract an all-star team of talent. The team would do pay-for-hire work, creating apps and whatnot for big corporate clients, and roll whatever profits they made into in-house projects.

They wanted to experiment, refine, experiment some more and hopefully create something they could launch into the market and potentially spin out into its own company.

One such experiment was CryptoKitties, a video game, where players create, buy, sell and trade adorably fuzzy virtual cats.

“Everybody loves cats,” Sam said.

CryptoKitties, a video game, where players create, buy, sell and trade adorably fuzzy virtual cats, has done more than US$40 million in sales.
CryptoKitties, a video game, where players create, buy, sell and trade adorably fuzzy virtual cats, has done more than US$40 million in sales. Photo by Dapper Labs

The game debuted in late 2017. By the spring of 2018, its top-selling kitty had rung in at US$140,000, and Dapper Labs was born, backed by US$12 million in investor money, an early show of faith that has clearly paid off.

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“The whole concept of collecting stuck with us,” Sam said.

CryptoKitties was the proof of concept — the game has done more than US$40 million in sales — but what came next really put the brothers into the big leagues.

The NBA, it turned out, was looking to crack into the digital space, and the brothers, with the success of CryptoKitties to wave around, pitched a meeting. More meetings followed and the rest, well, is a history that is still very much being written.

As big as the NBA is money-making wise, the NFL is a monster of another magnitude. Of the world’s 50 most valuable sports franchises, 26 are NFL teams,  according to Forbes, and the league’s US$10-billion-a-year television rights deal is roughly quadruple that of the NBA.

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Digital collectibles was another revenue source the NFL was ready to mine, and the tech team with a proven track record of results just happened to be the crew up in Vancouver.

“We can’t wait to give the more than 300 million NFL fans the opportunity to own the game that matters to them and engage with the sport in a whole new way,” Roham said of Dapper Labs’ NFL deal in a release this week.

But the brothers harbour ambitions beyond the sports world. Putting on his Axiom Zen hat, Sam said they also want to build a blockchain advocacy group, consisting of like-minded Canadian companies, big and small, to make the case to all levels of government that the new technology isn’t scary and it could be used to reduce bureaucracy.

For example, Sweden has experimented with putting its land registry on the blockchain, which created a single, secure public ledger of transactions related to a real estate deal that banks, brokers, buyers, sellers and government can all access, thereby streamlining a historically complicated process.

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“It is not all about initial coin offerings, and the crypto-boom, and making money off of blockchain, there are other practical applications outside,” Sam said, adding that he and Roham discuss politics all the time, and that he hasn’t completely abandoned his political aspirations.

As a tech guy, and an immigrant, his first priority were he ever elected would be to hack away at government red tape.

“Why do we have to jump through a million hoops in order to do something?” he said.

The brothers’ embrace of entrepreneurship didn’t come out of nowhere. Their father, Reza, had a high school education and a substantial work ethic. He moved his young family to Dubai from Tehran in 1993 to start an industrial gas and refrigerants company, selling to hospitals, automobile and beverage companies.

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“He is a self-made guy,” Sam said of their father, whose children benefited from the fruits of his successes and initially came to Canada on student visas, “because they had heard good things,” and made Vancouver home over Toronto. They later became Canadian citizens.

Life in Canada delivered some culture shocks. The brothers had never been to a house party or experienced the shenanigans of teenage life until they encountered the Vancouver scene.

There were other exotic attractions as well, which for Sam meant the Vancouver Canucks. In his Paris days, he was smitten by the Hollywood version of hockey in the Mighty Ducks movies. He also watched a lot of Friends, the long-running television series, which is sprinkled with New York Rangers references.

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  1. Dapper's NBA Top Shot collectibles grew by 30 times over 2021 with over US$780 million bought and sold.

    Vancouver’s Dapper Labs to produce digital football collectibles after reaching deal with NFL

  2. Allan Slaight’s final disappearing act after a long life, well lived, had those that knew him best eager to share their stories about him.

    The Magic of Allan Slaight: How an amateur magician became a business legend

  3. Crescent Point Energy co-founder Scott Saxberg’s new corporate baby is Calgary-based Cache Island Corp., which he describes as an “energy transition” company.

    Scott Saxberg 2.0: A Calgary oil king transitions to green energy

  4. There is a potential throwback answer to the nation’s affordable housing woes: the humble trailer park.

    Trailer parks could hold the answer to Canada’s national housing crisis

In Vancouver, Sam was primed to become an actual hockey fan, even though he had never heard of the home team. Now, he is a season-ticket holder — Roham is the basketball lover — a true die-hard, who loves the grace and physicality of hockey, hates that the Canucks suck, and is in a unique position to address whether Dapper Labs is eyeing a digital collectibles partnership with the NHL and its players.

“All I can say is, stay tuned,” Sam said.

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The NHL didn’t say anything when asked for comment, while the NHL Players’ Association, via spokesperson, suggested checking back with Dapper/Roham to see if they were interested in pursuing an NHL Top Shot.

Stay tuned, indeed.

Meanwhile, back on the 21st floor, Sam was discussing the siblings’ latest experiment: a puppy, named Luna. They share the dog, and, according to the person it was purchased from, she is a cross between a German shepherd and a rottweiler.

Luna, however, is lacking in size, but if the pooch possesses a good nose, there is a blue binder full of Pokémon cards her co-owner would love to sniff out.

“I think it would be worth a lot of money nowadays,” Sam said.

The same can be said of Dapper Labs.

• Email: joconnor@postmedia.com | Twitter: oconnorwrites

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