Co-founded by three friends in January 2020, RTFKT is a creator-led organization. They create NFTs of sneakers, memes, and other collectibles. Prior to its 2020 launch, RTFKT was an undefined collective that provided designs to select gaming companies and fashion labels. Co-founders Benoit Pagotto, Chris Le, and Steven Vasil decided to expand their presence in the metaverse and formed an entity. Since then, the startup has grown at an unthinkable rate.
“This is a unique opportunity to build the RTFKT brand and we are excited to benefit from Nike’s foundational strength and expertise to build the communities we love,” stated co-founder Benoit Pagotto. “Nike is the only brand in the world that shares the deep passion we all have for innovation, creativity and community, and we’re excited to grow our brand which was fully formed in the metaverse.”
Why the Acquisition?
The goal of the acquisition is to help Nike increase engagement with digital users. As one of the largest athletic footwear and apparel brands in the world, Nike explores ways to expand the digital side of its business and get in on emerging technologies like NFTs. Like other retailer companies, Nike has sufffered from supply chain delays. NFT sales could serve as another revenue stream that sidesteps supply chain woes.
“This acquisition is another step that accelerates Nike’s digital transformation and allows us to serve athletes and creators at the intersection of sport, creativity, gaming, and culture,” stated John Donahoe, the President and CEO of Nike. “We’re acquiring a very talented team of creators with an authentic and connected brand. Our plan is to invest in the RTFKT brand, serve and grow their innovative and creative community and extend Nike’s digital footprint and capabilities.”
Reaction from the NFT Community
NFT enthusiasts are excited another well-known brand is getting into the NFT action. Justin Bazdarich, a restaurant owner in Brooklyn who owns several NFTs, believes the Nike acquisition will encourage other large companies to participate in the NFT craze.
“If a big brand is coming into play like Nike, then they’re going to help educate people out there that this is the way of the future and will allow other industries to partake,” Bazdarich commented.
Thomas Arias, a 37-year-old who runs a small import business in Miami, is an avid NFT collector and is interested in building up a collection of virtual Nike sneakers. “I see an asset that possibly sometime in the future could be worth a lot more than what I paid,” said Mr. Arias.
Prior to the recent acquisition news, Nike had already been positioning itself to increase digital engagement. In late October, Nike filed several trademarks with the U.S. Patent and Trademark Office to protect its virtual sneakers and other goods stamped with the Nike swoosh logo. Shortly afterwards, Nike partnered with Roblox to create a virtual world called NIKELAND. The free online gaming platform enabled users to dress up avatars in Nike-branded sneakers and clothing.
“There’s so much white space for Nike to conquer in the digital realm as well,” Erinn Murphy, a senior analyst at Piper Sandler & Co., commented in response to the recent Nike acquisition news.
RTFKT raised $8 million in a seed funding round led by Andreessen Horowitz in May 2021. After that financing round closed, the startup was valued at $33.3 million. Although it could take time for Nike to make NFTs a major revenue stream and there are financial risks associated with the speculative nature of NFT pricing, the Nike acquisition holds significant promise for the athletic apparel giant.
Adidas NFT Collection
Footwear competitor Adidas has been at the forefront of NFTs. In mid-December 2021, Adidas launched its first NFT collection and made $23 million within a matter of hours. The 30,000 NFTs in the Adidas “Into the Metaverse” collection sold out the same afternoon that they went on sale.
Adidas collaborated with Bored Ape Yacht Club, Punks Comics, and GMoney to make the NFTs. Bored Ape Yacht Club and Punk Comics are NFT projects, while GMoney is a notable NFT collector and crypto enthusiast. Given the success Adidas experienced with its first NFT collection launch, it is unlikely to be the last NFT they offer.
Other Companies Getting into NFTs
Many companies, particularly the in the fashion and consumer-goods industries, have been quick to gain a foothold in NFTs. Several luxury fashion brands auction NFT collections, which are authenticated through blockchain technology. For example, a Dolce & Gabbana NFT collection raised $5.7 million at a recent auction.
In September 2021, Balenciaga partnered with Epic Games to bring high fashion to the online game Fortnite. In May 2021, Gucci entered the metaverse and launched a virtual environment on Roblox. The Gucci Garden experience showcased Roblox’s cutting edge developer tools and paid tribute to Gucci’s 100th anniversary. Finally, luxury shoemaker Jimmy Choo debuted its first NFT collection on the Binance NFT Marketplace in October 2021.