29/11/2022 Gary Vee-Backed NFT Startup Candy Digital Cuts Staff in Mass Layoffs

The company, valued at $1.5 billion, is backed by Fanatics and was co-founded by Gary Vaynerchuk and Mike Novogratz.

Gary Vaynerchuk. Image: Shutterstock
Gary Vaynerchuk. Image: Shutterstock

Candy Digital, a sports and entertainmentNFTstartup that was founded in 2021 and rocketed toa $1.5 billion valuationthat same year, laid off a large part of its staff today, a source close to the situation confirmed toDecrypt.

Sporticofirst reported the news that Candy had laid off more than one-third of its approximately 100-person team, citing sources close to the company. One former employee, Community Content Manager Matthew Muntner,tweetedthat he was included in the departures.Decryptreached out to Candy Digital for comment but did not receive an immediate response.

Candy Digital wasfounded in June 2021by Michael Rubin, executive chairman of sports merchandise giant Fanatics, along with Galaxy Digital founder and CEO Mike Novogratz and entrepreneur and investor Gary Vaynerchuk. Fanatics was described as the majority owner at the time and said that it would tap its existing customer base to promote Candy.

In October 2021, Candy Digital announced that it hadraised $100 millionat a $1.5 billion valuation, in a Series A round led by Insight Partners and Softbank’s Vision Fund 2. A Fanatics representative declined comment toDecrypt, noting that Candy Digital is run independently and that the sports merchandise firm isn’t involved in Candy’s day-to-day operations.

Candy launched with the official Major League Baseball license, and has sold a number of collections based on the league and its teams. Since then, the firm has rolled out other sports licenses, includinga partnership with World Wrestling Entertainment(WWE),all of NASCAR’s teams(but not the league itself), and a number of college athletes.

The company has also expanded into entertainment-themed digital collectibles, including with a Netflix alliance that hasyielded various “Stranger Things” NFTs. Candy alsoteamed with stock photo firm Getty Imagesto sell tokenized photos. Candy's NFTs were minted onPalm, anEthereumsidechainnetwork.

An NFT is a blockchaintokenthat represents ownership in a unique item, including digital goods such as sports collectibles, artwork, and video game items. The market expanded significantly in 2021, generating some$25 billion in trading volume, and that momentum carried into early 2022.

Candy Digital is the latest NFT-centric firm to face layoffs in recent months as the market has lost significant momentum amid a broader crypto market decline and wider macroeconomic turmoil. NFT saleshave fallen dramaticallysince the start of the year, with about 87% less total trading volume in October compared to January, andvaluations are sinking too.

NBA Top ShotandNFL All Daymaker Dapper Labs, one of Candy’s biggest rivals in the sports NFT space, laid off about 22% of its workforce earlier this month, although it’s unclear how many people were affected. Top overall NFT marketplace OpenSeashed 20% of its staff in July.

In addition to its investment in Candy Digital, Fanatics also has its own internal NFT business now following its estimated $500 million acquisition ofstoried trading card brand Toppsearlier this year.



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