Futureverse Acquire Candy Digital

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Futureverse Acquire Candy Digital 🍬

Futureverse has acquired Candy Digital, the NFT platform previously backed by the likes of Gary Vaynerchuk, Galaxy Digital and Consensys. The deal comes 18 months after Candy Digital and Palm NFT Studio announced a merger, and just over 2 years after Fanatics and Michael Rubin divested a 60% share in the business, reportedly at a big loss.

At the time, Rubin said:

“Over the past year, it has become clear that NFTs are unlikely to be sustainable or profitable as a standalone business”

Following the divestment, Candy Digital raised over $38m, adding to the $100m Series A the business raised in October 2021, which would value them at a whopping $1.5bn.

Regarding the Futurverse acquisition, Matt Novogratz, Co-Founder & SVP of Candy Digital, said:

Candy Digital still boast deals with MLB, DC Comics, amongst other big name IP.

[Pssst. Reminder we had their CEO Scott Lawin on the podcast last year!]

Futureverse

Futureverse has established itself as a prominent tech company in digital assets, gaming, metaverse and AI.

In July 2023, they secured a $54m Series A raise, making it one of the most well-funded and highest valuation tech startups to come out of New Zealand.

The company has built an extensive portfolio of IP deals with entertainment companies, including Warner Music Group.

Their focus has been on developing platform services and infrastructure rather than simply selling NFTs, which is where Futureverse began, as a merger of 11 different NFT projects.

They have a range of products, services and networks such as:

• Futureverse Pass: one-click onboarding login

• Connectibles: A digital rights manager for IP in digital environments

• Root Network: An EVM-compatible Layer 1 solution

• Reebok Impact: an AI-powered NFT platform, covered on Sporting Crypto here

• Readyverse: A Ready Player One Metaverse

This acquisition of Candy Digital means they are doubling down on utilising IP, and for Candy Digital, they are finally able to become part of a business with much more mature, cutting-edge technology stack where that IP can be utilised in a bigger variety of ways.

The NFT Market 📊

Broader Outlook

The NFT market has undergone a significant correction since its 2021-2022 peak.

Total NFT trading volumes across major marketplaces have declined substantially, with the speculative frenzy giving way to maturity in specific use cases and verticals.

Over the last 12 months, trading volumes have mostly consolidated around $100m per week, with specific periods seeing heightened activity.

This downturn has forced companies to reevaluate their business models. Those who raised capital at peak valuations, like Candy Digital, faced particular pressure to justify those valuations in a cooling market. That then shifted from emphasis on pure speculation to utility, infrastructure, and integration with broader digital experiences, for many NFT based businesses.

Indeed, Candy Digital have built out features that look more akin to a digital loyalty product with gamified challenges, exclusive and unlockable experiences, commemorative tickets and more — but the core focus of the business has always been, and still is, leveraging IP and selling digital collectibles.

Zooming in on Sports

Within the sports vertical, the picture is more nuanced.

Some sports NFT-based businesses, like Candy Digital, have consolidated, such as NBA Top Shot — hovering between $1.5-2.5m in monthly sales over the last month. A far cry from their lofty numbers at the beginning of 2021 to mid-2022.

NFT Fantasy game Sorare have also seen a drop off in monthly sales, although the Paris-based unicorn have still racked up ~$150m in sales over the last 12 months.