In a new wave of downsizing, Dapper Labs, the renowned developer behind celebrated NFT projects like CryptoKitties and NBA Top Shots, has confirmed another 51 employees will be exiting the company. This marks the third significant reduction in personnel in less than 12 months.
A Tough Market?
The company’s CEO, Roham Gharegozlou, used Twitter to broadcast an internal email that divulged the regrettable departure of 51 team members from the firm.
“It was an agonizing decision to let go of such outstanding talents, yet a leaner and more effective Dapper Labs is necessary and the correct direction to take,” Gharegozlou’s message conveyed.
Established in Vancouver, Dapper Labs gained acclaim for launching CryptoKitties, one of the pioneering NFT-based games, in 2017. This venture, which allowed players to collect digital “kitties,” propelled the company into the limelight.
In March 2021, Dapper Labs amassed an impressive $305 million in funding, reportedly elevating its post-funding valuation to an astonishing $2.6 billion.
However, the subsequent crypto downturn has been unkind to Dapper Labs. In November 2022, the company said farewell to 22% of its workforce, which was closely followed by another 20% reduction in February of this year.
Gharegozlou stated that the restructure would allow the business to “operate more efficiently, enable us to best serve our fans, and cultivate our communities in the healthiest possible way.”
According to the company’s LinkedIn page, 361 employees remain at Dapper Labs.
Decrypt has approached Dapper Labs for further comments and will update the story if we receive a response.
Despite the layoffs, Gharegozlou asserts that both Dapper Labs and Flow, the blockchain network powering NBA Top Shot, have ample capital to continue pursuing their mission.
“Flow is backed by a separate funding pool, which guarantees the team several years of cash flow, negating the need to sell tokens for short-term operations,” Gharegozlou added.
The news comes as the larger NFT market navigates rough waters, with falling floor prices and NFTGo’s Blue Chip Index – calculated based on the market cap of leading collections – dropping to 5,867 ETH from its annual high of 12,394 ETH in July 2022.
In unrelated news, Dapper Labs faces a class-action lawsuit alleging its NBA Top Shots NFTs are securities, and as such, should be registered with the Securities and Exchange Commission. A judge recently refused Dapper Labs’ plea to dismiss the case, ruling that the platform’s NFTs do appear to meet the criteria of a security.
What is Dapper Labs Known For?
Dapper Labs first earned their acclaim in the blockchain space with the launch of CryptoKitties, an innovative game centered on the creation, collection, and trading of virtual felines. Each kitty in the game is an NFT, or non-fungible token, making them one-of-a-kind digital assets with their own unique characteristics.
Launched in 2017, CryptoKitties was one of the earliest and most successful ventures into the NFT sphere. The game’s immense popularity effectively catapulted Dapper Labs into the limelight, showcasing the significant potential and appeal of NFT-based games to the broader public. The success of CryptoKitties firmly established Dapper Labs as a trailblazer in the fusion of gaming and blockchain technology.