Gary Vee-backed NFT startup Candy Digital cuts staff in mass layoffs

Candy Digital, a sports and entertainment NFT startup that was founded in 2021 and moved to a valuation of $1.5 billion in the same year, a large part of the employees laid off today, confirmed a source close to the situation Decrypt.

Sportico first reported the news that Candy had laid off more than a third of its team of around 100 people, citing sources close to the company. A former employee, Community Content Manager Matthew Muntner, tweeted that he was with the departures. Decrypt contacted Candy Digital for comment, but did not immediately receive a response.

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

In October 2021, Candy Digital announced that it had raised $100 million at a $1.5 billion valuation, in a Series A round led by Insight Partners and Softbank’s Vision Fund 2. A representative for Fanatics declined to comment Decryptand notes that Candy Digital is run independently and that the sporting goods company is not involved in Candy’s day-to-day operations.

Launched with the official Major League Baseball license, Candy has sold a variety of collectibles based on the league and its teams. Since then, the firm has rolled out other sports licenses, including a collaboration 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 has gave various “Stranger Things” NFTs. Candy too in collaboration with the archival photography company Getty Images to sell tokenized images. Candy’s NFTs were minted on Palm, an Ethereum side chain Network.

An NFT is a blockchain token which represents ownership of a unique item, including digital goods such as collectibles, artwork, and video game items. The market expanded significantly in 2021, generating some $25 billion in trade volumeand that momentum continued 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 downturn and greater macroeconomic turmoil. NFT sales has fallen dramatically since the beginning of the year, with approx. 87% less total trading volume in October compared to January, and valuations are also falling.

NBA top shot and NFL all day Manufacturer Dapper Labs, one of Candy’s biggest rivals in the NFT sport, laid off roughly 22% of its workforce earlier this month, though it’s unclear how many were affected. Top general NFT marketplace OpenSea lost 20% of employees in July.

In addition to the investment in Candy Digital, Fanatics also has its own in-house NFT business now following the estimated $500 million acquisition of history trading card brand Topps earlier this year.