Inside the deal: Why Williams stepped back into the crypto world with Kraken

The Williams name is one steeped in Formula One history, but recent years haven’t been kind to the Grove-based outfit.

Founded by Frank Williams and Patrick Head in 1977, Williams are one of the most successful Formula One teams ever. Only Ferrari, McLaren and Mercedes have picked up more wins in the history of the sport. The team has also carried seven different drivers to the world championship title, including the likes of Nigel Mansell, Alain Prost and Damon Hill. The last of these, however, came from Jacques Villeneuve in 1997.

However, longevity is what truly sets the British team apart. Williams first raced in Formula One in 1978, with Ferrari and McLaren the only teams that can boast a longer tenure.

But with no success in 26 years, it’s been a barren run for Williams. Financial difficulties have followed as the team has struggled to attract sponsors. Those issues were exacerbated by the Covid pandemic and Williams were subsequently sold to Dorilton Capital in May 2020.

With the Williams family stepping away from the team just four months later, it presented a new dawn for a team that had finished bottom of the constructors’ standings in 2018 and 2019. Though the team would match that unwanted achievement again in 2020 and 2022, the change of ownership gave Williams much-needed fresh impetus.

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Financial challenges are now less of a concern, largely due to the ever-increasing popularity of Formula One that has seen the estimated value of each team rise 276 per cent to US$1.88 billion.

While Forbes ranks Williams as the least valuable of Formula One’s ten teams, they are still worth an estimated US$725 million, which is considerably more than the UK£136.5 million (around US$177 million at the time) that Dorilton paid to buy the team in 2020.

Williams’ on-track performance is slowly improving, and their current position of seventh in the constructors’ standing is their best since 2017. This can largely be attributed to the leadership of new team principal James Vowles, who has described some of the technology available at Williams’ Grove base as “20 years out of date”, and the performances of star driver Alexander Albon.

However, this uptick in fortunes has yet to be emulated commercially. It’s fair to call the Williams car one of the barest on the Formula One grid, with considerable branding space being given to Gulf and Duracell, but not many other brands.

Better on-track performances will lead to more commercial conversations, but one brand that has already invested in the team’s journey is Kraken. Valued at US$11 billion in 2022, the US-based firm was one of the world’s first cryptocurrency exchanges, but had shied away from sponsorship until signing a deal with Williams in 2023.

So what caused the company’s change of approach? BlackBook Motorsport talks to Mayur Gupta, chief marketing officer at Kraken, and Williams Racing’s chief revenue officer Paul Asencio and commercial director James Bower, to find out.

The 2023 Williams entry has considerable vacant branding space

A shared ethos

As the popularity of Formula One grew in tandem with Netflix’s Drive to Survive docuseries, so too did the interest of crypto companies looking for a route into sports sponsorship.

In 2022, every Formula One team had a crypto partner, but the spectacular collapse of FTX has seen a shift in attitudes. Whether it be the ill-tempered split between Ferrari and Velas, Red Bull dropping its partnership with Tezos, or Williams themselves stepping away from their deal with Virtua, the sector is not as prevalent as it once was.

In that context, both Williams’s decision to pursue a crypto sponsorship and the timing of Kraken’s entry into the world of Formula One seem puzzling. But the company has a different approach in mind.

“If you look at Kraken’s history, we really haven’t done a partnership of this scale, despite how big we are and despite what happened during the bull run where everybody was jumping on and doing partnerships in Formula One,” Mayur Gupta, Kraken’s chief marketing officer, tells BlackBook Motorsport.

“When we started talking to Williams, it made a lot of sense for both our iconic brands that have stood the test of time. They both embody what’s possible when you combine vision and engineering with innovation.

“We felt Williams gave us an incredible platform to drive the education and awareness on the substance of crypto, and not just the service and the volatility. [It allow us] to really highlight to the world and the fanbase what’s lacking in the traditional financial systems [and] what value crypto brings.”

The history of the team is prevalent throughout Kraken’s messaging around the partnership, which seeks to amplify the longevity of both brands. That was a key attraction for the crypto exchange, even if the comparative histories of the two parties are very different in length.

“In our discussions, it was pretty straightforward because of the history and the legacy that Kraken brings, [and] the confidence and the focus we have on the future roadmap,” Gupta continues. “We spoke about all kinds of experiences we could create together, which made a lot of sense to Williams.”

James Bower, the commercial director at Williams, adds: “12 years doesn’t sound like a long time, but in that space they’re one of three companies that are that old. It has a similar heritage and a similar brand equity.”

One of the first activations Gupta alluded to will be at the United States Grand Prix on 22nd October. Williams and Kraken will allow six people the chance to feature their non-fungible tokens (NFTs) on the rear wing of the Williams car at the race in Austin, with two of the winners to be selected by team drivers Albon and Logan Sargeant.

The American dream

Despite being based in the US, Gupta says that Kraken is a global company. In fact, he reveals that Kraken’s footprint in Europe in terms of its client base and volume “is much higher than the US”.

That isn’t to say that its American roots didn’t play a part in getting the deal done. Williams are US-owned through Dorilton, have the only American driver on the grid in Sargeant, and have an office in New York to support their growth in the market.

Six people will have the chance to feature non-fungible tokens (NFTs) on the rear wing of the Williams car at the United States Grand Prix

One of the individuals tasked with generating more commercial income for the team is new chief revenue officer Paul Asencio, who has been based in the team’s New York office since joining from the Ultimate Fighting Championship (UFC) in April. In a way, both Asencio and Kraken are discovering what Formula One has to offer at the same time.

“What I’m blown away by is the access we’re able to deliver to our partners and their guests,” explains Asencio. “I’ve been in sports a really long time, 25 years, and the first experience I had in Miami, being able to go into the garage, being able to be that close to the cars, being able to watch them do pitstop practices – I was blown away by the grid walk before the race.

“I think that Kraken is just starting to warm up and understand the full capability and what we’re able to deliver them. We’re going to end up expanding on that as we start to get to know each other better.”

During his time at UFC, Asencio claims to have grown the business over 300 per cent in five years, which should bode well for his new employer. The mindset he applied at the mixed martial arts (MMA) company is something he’ll be looking to recreate with Williams.

“Williams really needed somebody in this role to come in with a vision of how we’re going to get everybody together, and not just [aim to do] deals on the car,” he explains. “How do we take these deals and market it to our fanbase? How do these deals help to increase our fanbase? How can these deals be tied into our merchandising and licensing? And how does it comes together to benefit Williams?”

While Dorilton has also helped Williams grow its connections in the US, the influence of the team’s new owner can also be seen in its more diligent approach to commercial matters, according to Bower.

“We could have done fan tokens with another brand in 2021,” he highlights. “We had the view [from Dorilton] that fan tokens [don’t] create value for fans, we don’t want to do them. There was a big rush on those in 2021 and it pretty much all collapsed. So it just shows you that they have a good view.”

Questions about crypto

As always, doubts linger about the sustainability credentials of the crypto industry. As Formula One continues to promote its Net Zero goals for 2030, there remain a number of commercial partnerships across the sport that – on the surface, at least – don’t appear to take the environment into consideration. But as Formula One tries to map out a more environmentally-conscious future, so too is the crypto sector.

“There’s a lot of evolution happening in crypto, from the consensus mechanisms evolving from proof of work to proof of stake, which are a lot more energy efficient,” says Gupta. “Crypto is on a journey, it’s not perfect in it’s current state. It will continue down this path of constant evolution and innovation across all aspects, including sustainability.”

That ongoing shift is certainly of importance to Williams, according to Bower.

“It’s definitely something that is front of mind for us, [seeing] how it fits into our broader sustainability strategy,” he says. “Not just [in terms of] environmentally, but in terms of access to industry and other ways that we can leverage things like education to find new ways to engage fans.”

Leveraging the partnership to improve education around crypto will be crucial, especially now that Formula One is engaging with a younger fanbase. When teams are providing exposure for crypto brands, it is therefore imperative that the messaging outlines the risks that come with the industry.

“At Kraken, this is a central focus,” Gupta says. “We are not looking to bring hundreds of millions of people and have them move their assets. In fact, we publicly share that if you’re not actively trading, then self-custody your assets.”

Crypto is on a journey, it’s not perfect in it’s current state. It will continue down this path of constant evolution and innovation across all aspects, including sustainability.

– Mayur Gupta, Chief Marketing Officer, Kraken

For Asencio, he believes tighter regulations are needed for the wider public to have greater faith in the crypto industry.

“The regulatory side of things needs to be firmed up a bit, just because it gives everybody this level of comfortability,” he explains. “The volatile nature of what crypto is all about is what scares people. The stock market is volatile in its own right…but people will have a much better level of comfort if there were some more regulations around it.”

Once those questions are answered, Williams can continue to take steps on their ongoing commercial journey, which will only accelerate as their on-track results improve.

“We’re on a long-term journey and we know the things that we’re doing to return the team to the level of competitiveness enjoyed in the past and to become a multiple world championship winning team again,” concludes Bower. “But it’s nice when you have weekends [like Albon’s seventh place in Canada] where some of that comes across externally.

“That’s what sport’s about: doing something that you don’t even know if it’s possible or not.”