Funko is well-known for its pop culture collectible figurines with oversize heads depicting a wide range of characters from movies like Star Wars to rock bands like Kiss.
Now the toymaker is jumping on the NFT (non-fungible tokens) craze in a move that could help it expand its revenue sources: Funko said on Thursday it was a taking a majority stake in TokenWave, the developer of the TokenHead app, which showcases and tracks NFTs. The app currently displays about 10 million NFTs.
Funko shares rose as much as 27% in early trading on the news and by midday had settled around a 13% increase. Shares have doubled since the start of the year.
NFTs are digital certificates that record ownership and prove the authenticity of unique digital assets. They allow people to own limited-edition digital assets that are verified, helping avoid counterfeits. These tokens can also be bought, sold, and traded on exchanges, creating a robust market for them.
And though they are certainly a fad, they’re a potentially lucrative one: Last month the artist Beeple sold a collage of digital images he created over the course of 5,000 days for $69 million. The craze extends beyond the world of art: Twitter CEO Jack Dorsey sold his first tweet as an NFT.
Funko is betting that its enormous roster of licenses from a wide swath of pop culture—be it movies, music, sports, and otherwise—will give it many products to sell in the NFT market. It plans to start selling NFTs in June, with one item each week starting for $9.99.
“Our strategy in this space is clear—bring the value-added NFT opportunity to our licensing partners to leverage our broad range of existing pop culture content across television, movies, sports, music, anime, video games, and comic books,” CEO Brian Mariotti said in a statement.
And complementing an assortment of physical products with digital ones will help the company diversify its sources of revenue and adapt to its consumers’ growing interest in digital assets.
In its most recent quarter, Funko sales jumped 6% to $226.5 million. The company expects revenue to rise as much as 30% this year, no doubt aided by a nascent presence in the NFT market.