The NFT market took another one on the chin Wednesday when Fanatics sold off its majority stake in Candy Digital, an NFT company it cofounded in 2021, a source confirmed to Axios.
Why it matters: As the “crypto winter” gets colder for investors, the once-booming sports NFT space has taken a nosedive.
- “Over the past year, it has become clear that NFTs are unlikely to be sustainable or profitable as a standalone business,” Fanatics CEO Michael Rubin wrote in an internal email, according to CNBC, which first reported the news Wednesday.
Details: Fanatics is selling its 60% stake to an investor group led by Galaxy Digital, a crypto merchant bank led by Mike Novogratz, Candy Digital’s other founding shareholder.
- Terms of the sale were not known.
Flashback: Candy Digital was founded in June 2021 in the heat of the sports NFT boom.
- The company landed a major licensing deal with Major League Baseball for a series of NFTs, and scored further deals with Netflix, WWE and multiple NASCAR teams.
- In October of that year, it was valued at $1.5 billion after getting a $100 million investment round that included SoftBank, Insight Partners, and NFL legend Peyton Manning.
Of note: Fanatics is fresh off a $700 million funding round aimed at acquisitions in its bid to become a full-fledged media business.