Fanatics sells its majority stake in NFT company Candy Digital
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.