Fanatics Inc. has sold most of its stake in the digital-collectibles company Candy Digital amid turbulent times for nonfungible tokens.
(Bloomberg) — Fanatics Inc. has sold most of its stake in the digital-collectibles company Candy Digital amid turbulent times for nonfungible tokens.
The sports merchandiser was once Candy Digital’s largest holder but has now sold most, but not all, of its stake to a group that included existing investor Mike Novogratz’s Galaxy Digital Holdings Ltd., and ConsenSys, which was started by Ethereum co-founder Joseph Lubin. The announcement from Candy Digital didn’t disclose terms.
Fanatics’ Chief Executive Officer Michael Rubin cited the “imploding NFT market” in an email to employees as part of the reason for the move, Sportico reported. Fanatics didn’t respond to a request from Bloomberg News for comment.
In 2021, Candy Digital was valued at $1.5 billion after raising $100 million in a financing led by private-equity firm Insight Partners and SoftBank Vision Fund 2, with investors including former professional football player Peyton Manning. The market for NFTs has since plunged, with November sales off 89% from January’s record high of more than $4.9 billion globally, according to blockchain data tracker CryptoSlam.
“A key component of the transaction is aligning ourselves with investors who see the opportunity the same way, and see the opportunity in the current down market to focus on building for the future,” Candy Digital CEO Scott Lawin said in an interview. He declined to elaborate on exact terms or stakes in the deal.
Candy plans to work with ConsenSys Mesh to accelerate its capabilities in areas like payments and custody, according to the release.
Candy Digital’s partners include Getty Images Holdings Inc., Netflix Inc., World Wrestling Entertainment Inc. and Major League Baseball. It also has a Candy Sweet Futures NFT series, the first NFT series that markets college athletes.
The partnerships are still intact and are independent of Candy’s ownership structure, Lawin said in the interview. Despite recent volatility in the space there has actually been more interest in Web3 — an iteration of the web with fewer intermediaries and more direct interaction between users and content providers — he said.
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