Funko is taking the popularity of its pop-culture collectibles into the future and embracing the hysteria around NFTs.
The Everett, Wash.-based maker of toys and figurines announced Thursday that it is acquiring a majority stake in TokenWave, developer of TokenHead, a mobile app for showcasing and tracking non-fungible token (NFT) holdings. Financial terms of the deal were not disclosed.
NFTs are are a hot commodity and the talk of the tech world. They let people own verified, limited edition digital assets and buy, sell, or trade them on marketplaces. The craze across art, sports, gaming and elsewhere taps into some of the interests and habits of traditional collectors, but with a modern twist built on the back of blockchain.
Funkos investment accelerates its entry into the NFT market and will extend the companys pop culture platform to include digital assets. The initial focus will be around Funkos best-known product, its Pop! figurines, for which Funko holds licenses to create characters across a wide range of properties from television, movies, sports, music, comics, video games and more.
Funko plans to launch its first NFT offerings in June, featuring a unique property each week at a starting price point of $9.99. CEO Brian Mariotti called the marriage of physical and digital a powerful offering.
Our ability to combine Funko Pop! digital NFTs with exclusive Funko Pop! vinyl figures has the potential to be a game changer, Mariotti said in a news release. By backing the rarest of the Funko NFTs with exclusive redeemable Funko Pop!s, we are poised to enter the NFT market in a very unique manner.
He said its important to to make Funko NFTs broadly accessible to fans by providing affordable entry pricing. Products will be sold on the Worldwide Asset Exchange (WAX) platform, a leading decentralized wallet on the blockchain. WAX will provide verifiable authenticity for purchases of Funko NFTs.
Mariotti said the strategy is clear to capitalize on NFTs for itself and its licensing partners, including by generating revenue each time a token sells on the secondary market.
Digital leads to physical and physical to digital, Mariotti told GeekWire. For mainline product, we may do promotions like offer free NFTs to get them into the digital world. You will see strong physical and digital strategies to make this successful. Each card will have an experience that includes motion and artistic creativity, a truly interactive experience.
TokenWave co-founder Nate Denning said his small company is excited to apply its expertise and technology to Funkos entry into the NFT space.
The vast catalog of Funko content will allow us to produce amazing experiences in the NFT world for the millions of Funko fans worldwide, Denning said, adding that the TokenHead app will showcase NFTs and engage with Funko fans in a brand new way.
The move into digital content offerings comes just a couple weeks after Funko announced strong fourth quarter earnings. Net sales jumped 6% year over year to $226.5 million, and in the U.S. the 22-year-old company had its best quarter ever domestically, with sales up 18% to $171 million.
The company, which employs 500 people worldwide, cut about 250 employees last summer and then made a major shift into direct-to-consumer sales to meet the demand of online shoppers during the pandemic. It currently operates physical retail locations at its Everett headquarters and in Hollywood, Calif.