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Candy Digital, the non-fungible token (NFT) platform backed by Fanatics, has laid off a large proportion of its staff.
Sportico first reported that the company, also backed by entrepreneur Gary Vaynerchuk (pictured) and Galaxy Digital founder Michael Novogratz, had cut more than a third of its 100 employees. Among those being laid off included Matthew Munter, a community content manager at Candy Digital who tweeted confirmation of his departure.
Fanatics declined to comment on the job cuts when approached by SportsPro, but made clear Candy Digital was run independently from Fanatics and it was not involved in the day-to-day operations of the company.
Candy Digital was founded in June 2021, with Fanatics as its majority owner. In October 2021 the venture raised an additional US$100 million through a Series A funding round led by Insight Partners and Softbank Vision Fund 2, valuing the company at US$1.5 billion.
The digital collectible venture has a major partnership with Major League Baseball (MLB), with the agreement allowing Candy Digital to build the league’s official NFT ecosystem. In January it launched a secondary marketplace for officially licensed MLB NFTs, which generated sales worth US$2.7 million on its first weekend.
The company also has partnerships with World Wrestling Entertainment (WWE), every Nascar team (but not with the competition itself), and several college athletes.
The layoffs at Candy Digital come weeks after digital collectible marketplace firm Dapper Labs made staff cuts of its own, with 22 per cent of its workforce departing the company.
Sales of NFTs have dropped significantly. Blockchain tracker DappRadar reported that the third quarter of 2022 saw US$3.4 billion in NFT sales, US$5 billion less than the previous quarter.
Majority owner Fanatics was valued in March at US$27 billion. As well as acquiring trading card giant Topps for US$500 million, it also plans to launch a betting business in January, aiming to be in 15 to 20 US states by the start of the 2023 National Football League (NFL) season.
Fanatics chief executive Michael Rubin said in October that he believed additional business segments and sports betting could hit US$8 billion in profits in the next decade.
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