The Block: Fanatics sells majority stake in NFT shop Candy Digital to group led by Galaxy and ConsenSys Mesh

Fanatics is selling its majority stake in NFT shop Candy Digital.

The sports merchandising comp any owned by Michael Rubin is no longer Candy Digital's principal shareholder after a new round of Series A1 financing, according to Candy Digital. The new wave of financing is led by crypto billionaire Mike Novogratz's Galaxy Digital and ConsenSys Mesh.

Fanatics' divestment comes amid a prolonged downturn in digital assets, which has seen NFT trading volumes plummet along with cryptocurrency prices.

“We believe that the Candy team is well-positioned to capitalize on the rising demand for NFT products and expand into new industries and markets," said Novogratz in a statement.

Fanatics retains a smaller ownership stake in the NFT company, a Candy Digital spokesman said by email.

Earlier in the day CNBC reported that Fanatics was seeking to divest its 60% stake in Candy Digital, citing an internal email.

Once valued at $1.5 billion, Candy Digital laid off a large number of its employees at the end of last year. The company was founded in 2021 and backed by both Novogratz and Gary Vaynerchuk.

Candy Digital has worked on NFT projects linked to major brands like Major League Baseball, NASCAR, World Wrestling Entertainment and Netflix.

Neither Fanatics or Galaxy Digital responded to requests for comment.

Updates with confirmation of the Series A1 financing and Fanatics' retention of a small stake in Candy Digital.

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