Gary Vee-Backed NFT Startup Candy Digital Cuts Staff in Mass Layoffs

In brief

Sports NFT startup Candy Digital completed layoffs today, a source confirmed to Decrypt.
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.

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

Sportico first 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, tweeted that he was included in the departures. Decrypt reached out to Candy Digital for comment but did not receive an immediate response.

Candy Digital was founded in June 2021 by 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.

I hate that I have to share this as much as I loved my job at @CandyDigital but I was part of the layoffs that occurred earlier today.

I am quickly looking for a new role in Community Management, Graphic Design, or related Marketing.

Thanks, Candy Fam for one hell of a ride ❤️

— Muntner (@muntnerdesigns) November 28, 2022

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 Fanatics representative declined comment to Decrypt, 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, including a 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 has yielded various “Stranger Things” NFTs. Candy also teamed with stock photo firm Getty Images to sell tokenized photos. Candy’s NFTs were minted on Palm, an Ethereum sidechain network.

An NFT is a blockchain token that 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 sales have fallen dramatically since the start of the year, with about 87% less total trading volume in October compared to January, and valuations are sinking too.

NBA Top Shot and NFL All Day maker 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 OpenSea shed 20% of its staff in July.

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

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