Collectors have spent over $230 million on virtual “moments” on Dapper Labs’ NBA Top Shot.
Source: Dapper Laboratories
Dapper Labs, the non-fungible token (NFT) company known for creating collectible moments around NBA and NFL highlights, is laying off 22% of its business, according to a note from its CEO.
The Vancouver-based firm, which ranked No. 9 on CNBC’s Disruptor 50 of 2022 list, is the latest blockchain and web3-focused company to suffer layoffs amid the “crypto winter” in course that saw the prices of almost all digital products. assets fall.
More broadly, tech companies announced layoffs and hiring freezes while scrambling to cut costs amid a deteriorating economic outlook, with venture capital-backed fintechs Stripe and Chime also announcing job cuts this week. Netflix, Spotify, Coinbase and Shopify have already announced layoffs, while Google parent Alphabet Amazon and Facebook owner Meta have also sought to cut spending by slowing hiring or cutting staff.
“We know that Web3 and crypto are the future across a multitude of industries – with 1000x potential for mainstream adoption and impact – but the current macro environment means we don’t. we don’t have full control over the timing,” said the founder and CEO of Dapper Labs. Roham Gharegozlou wrote in a message to employees on Wednesday evening.
Dapper Labs had more than 600 employees before the layoffs, Gharegozlou wrote. The company will “double down on what will move the needle and take the entire industry to its next inflection point – and pull out anything that doesn’t align with that goal,” he said. writing.
A Dapper Labs spokesperson confirmed the rating.
Launched in 2018, Dapper Labs burst onto the scene through its NBA Top Shot platform, which allows users to buy, trade and collect basketball highlights in the form of NFTs. Each of the highlights, which he calls moments, is licensed by the NBA, which collects royalties from each transaction.
It gained popularity in early 2021, with over $224 million in sales on the platform from over 1.3 million transactions in March 2021, which accompanied the spike in interest in NFTs more widely, according to NFT data aggregator CryptoSlam.
This helped Dapper Labs raise $250 million in a September 2021 funding round led by Coatue, which valued the company at $7.6 billion. In total, the company has raised over $650 million and has an investor table that includes venture capitalists like Andreessen Horowitz, Union Square Ventures, and Google Ventures, as well as current and former stars of the NBA like Kevin Durant, Klay Thompson and Michael Jordan. .
In August, Dapper Labs launched a football-focused NFT platform with the NFL called NFL All Day, applying a similar formula to what it did with the NBA around its strengths.
However, as interest in NFTs has waned, so has the popularity of Dapper Labs’ platforms.
In October, which coincided with the start of the 2022-23 NBA season, there were $2.7 million in sales on the NBA Top Shot platform, compared to $40.9 million from the previous year. , a decrease of 94%. The platform has seen four consecutive months of declining sales and unique buyers totaled 13,462 in October, down from 65,769 in October 2021.
The NFL All Day market also saw a decline, with volume of $6 million in October compared to $14 million in September.
Dapper Labs also has a partnership with Endeavour-owned UFC and Spanish soccer league La Liga.
Sports leagues and properties have embraced crypto-focused businesses in recent years as a massive sponsorship category as well as a new way to reach fans, with no better example than perhaps the naming rights deal. $700 million over 20 years from Crypto.com last year for the arena that is home to the Los Angeles Lakers, Kings and Sparks. A February 2022 report from Nielsen predicted that there would be $5 billion in blockchain and crypto corporate sponsorships in esports by 2026. Although there was apparently a rush of offers alongside the rise in crypto prices, it declined as prices cooled.
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