Candy Digital, an NFT startup backed by Gary Vee, has announced massive layoffs

    The company surged to a $1.5 billion valuation just months after it was founded in 2021, but the wider NFT market has struggled in 2022.

    According to NFT Today Magazine’s sources, a significant portion of the workforce at Candy Digital, a sports and entertainment NFT startup founded in 2021 and quickly valued at $1.5 billion, was let go today.

    Sportico was the first to break the story that Candy had fired more than 30 of its 100-person workforce, citing anonymous sources close to the business. Matthew Muntner, the community’s content manager, confirmed via Twitter that he had been let go. NFT Today Magazine contacted Candy Digital for comment but did not immediately hear back from them.

    Candy Digital was founded in June 2021 by Mike Novogratz (founder and CEO of Galaxy Digital), Gary Vaynerchuk (entrepreneur and investor), and Michael Rubin (executive chairman of sports merchandise giant Fanatics). Fanatics was reported to be the company’s majority shareholder, and it was stated that the company would use its existing customer base to market Candy.

    Candy Digital announced in October 2021 that it had secured a $100 million Series A round of funding, with leading investors including Insight Partners and Softbank’s Vision Fund 2. This gave the company a valuation of $1.5 billion. NFT Today Magazine could not get a response from a representative of Fanatics, who explained that the sports apparel company isn’t involved in Candy Digital’s day-to-day operations and, therefore, couldn’t comment. Candy has a long history of success in the collectibles industry, and its recent launch with the official MLB license has resulted in the sale of multiple MLB-themed collections. The company has since expanded into other sports licensing, including deals with WWE, NASCAR’s teams (but not the league itself), and various collegiate athletes.

    The company has also diversified into digital collectibles based on popular culture within the entertainment industry, with the help of partnerships with companies like Netflix that have produced several “Stranger Things” NFTs. Candy partnered with stock photo agency Getty Images to sell tokenized images. Candy NFTs were created on Palm, a network that operates as a sidechain of Ethereum.

    NFTs are digital tokens backed by the blockchain that can be exchanged for real-world or virtual versions of the item they represent. The market grew substantially in 2021, with $25 billion in trading volume, which continued into early 2022.

    As the market has lost significant momentum in recent months due to a general decline in the crypto market and wider macroeconomic turmoil, Candy Digital is the latest NFT-centric firm to undergo layoffs. Since the beginning of the year, NFT sales have plummeted, with total trading volume in October being roughly 87% lower than in January and valuations also falling.

    One of Candy’s main competitors in the sports NFT space, Dapper Labs, responsible for games like NBA Top Shot and NFL All Day, reportedly laid off around 22% of its staff earlier this month. OpenSea, the largest NFT marketplace, laid off twenty percent of its workforce in July.

    Following its estimated $500 million acquisition of legendary trading card brand Topps earlier this year, Fanatics has its own internal NFT business now, in addition to its investment in Candy Digital.

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