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Dapper Labs, the company behind the NBA Top Shot and NFL All Day digital trading platforms, is laying off 22 per cent of its workforce.
Roham Gharegozlou (pictured above), the non-fungible token (NFT) marketplace’s founder and chief executive, confirmed the decision in a letter to Dapper Labs staff, describing the reduction as ‘necessary for the long-term health of our business and communities’.
‘We know Web 3.0 and crypto is the future across a multitude of industries – with 1000x potential from here in terms of mainstream adoption and impact – but today’s macroeconomic environment means we aren’t in full control of the timing,’ said the letter from Gharegozlou.
Founded in 2018, Dapper Labs grew from 100 to more than 600 employees in less than two years. The Vancouver-headquartered firm was initially best-known in the sports space as maker of the National Basketball Association’s (NBA) Top Shot, which lets users buy, trade and collect basketball highlights in the form of NFTs. Launched in October 2020, Dapper Labs said the platform had facilitated US$700 million in sales on the marketplace by May 2021.
Since then, Dapper Labs has made inroads into other sports, including inking deals with the National Football League (NFL), the Ultimate Fighting Championship (UFC) and Spanish soccer’s LaLiga.
In September 2021, the company raised US$250 million in a funding round led by global investment manager Coatue. That reportedly saw Dapper Labs’ value hit US$7.6 billion, meaning it had tripled in value in less than six months. In total, Dapper Labs has raised more than US$650 million and counts Google Ventures, as well as past and present NBA starts Michael Jordan, Klay Thompson and Kevin Durant, amongst its backers.
However, the popularity of Dapper Labs’ platforms and a broader interest in NFTs have fallen. As reported by CNBC, there was US$2.7 million in sales across the NBA Top Shot platform in October, down 94 per cent from US$40.9 million the previous year. The platform has also seen four straight months of sales declines and unique buyers totalled 13,462 last month, compared to 65,769 in October 2021.
CNBC added that the NFL All Day market also saw a decline, with US$6 million in volume in October down from US$14 million in September.
‘Across Dapper Labs, we are doubling down on what will move the needle and get the whole industry to its next inflection point – and pulling back on everything that doesn’t fit that focus,’ said Gharegozlou.
‘While we are ourselves taking big swings to 10x the market size, we also need to become a focused, streamlined organisation that lets us get to profitability, control our own destiny, and sustainably build toward achieving our mission, no matter the economic conditions over the next few years.’
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