Dream Sports-backed cricket NFT platform Rario announced a sudden shutdown of its product, causing distress among investors.
Retail investors, who had purchased NFT cards featuring over 1,100 cricketers including Sachin Tendulkar and Virender Sehwag, are now facing potential losses of nearly Rs 30-40 crore, as per multiple media reports.
What does Rario say?
Rario said it would shut down its current product on January 29 and relaunch in March, with the current cards being unusable on the new platform.
In response to the investors outcry, The startup said plans to compensate users for their losses, with details to be provided the following week. It had previously raised $120 million in funding and spent around Rs 148 crore on licensing deals.
Management and financial turmoil
The turmoil within Rario has been ongoing. Founders Ankit Wadhwa and Sunny Bhanot departed in August 2023 amid disagreements with Dream Sports.
The startup, which had over 700,000 users, turned into a cash-burning entity, spending Rs 600 crore to earn Rs 39 crore and writing off NFTs worth Rs 458 crore in the last fiscal year.
Rario faced legal challenges when the Delhi High Court rejected its plea against rival Striker and MPL, impacting its costly rights acquisitions.
Rario's next move
Rario is set to launch a new platform in March 2024, promising engaging cricket-based games. The startup has appointed CFO Priyesh Karia as the interim CEO and assured that customers' wallet cash balances are safe until March 31, 2024.
The new management team aims to steer the business in a positive direction, amidst industry headwinds and a crash in the NFT sector.
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