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17 May, Tuesday
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Utah Business

Last month, details of the RTFKT acquisition by Nike hit newsstands--now we're interviewing the founders to find out more.

Nike is taking on the metaverse with their acquisition of RTFKT

Utah-based NFT company RTFKT joined the ranks of some of the world’s most iconic brands in December when Nike announced it had acquired RTFKT for an undisclosed sum. “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,” Nike president and CEO John Donahoe said at the time. 

RTFKT, pronounced ‘artifact,’ was founded by Benoit Pagotto, Chris Le, and Steven Valisev in January 2020, quickly shooting up in value and cultural prominence with its “cybersneakers sold to the metaverse.” According to their website, the project was originally scheduled for takeoff in 2040, “but the human development in consciousness has accelerated faster than anticipated.”

“We are here to accelerate our digital future now,” the website says. “For many years, RTFKT was an undefined collective, working strictly in the shadows, providing designs and concepts to game companies and a few select fashion brands. In 2020, they formed an entity to expand their services into the public metamarket. The response has been excellent, and RTFKT’s social growth has been almost frightening.”

Individually, RTFKT’s virtual sneakers on OpenSea have recently sold for over 20 ETH, or roughly $80,000. Elon Musk purchased a pair of the company’s $90,000 cyber sneakers, with other drops selling between $500 and $100,000. In February of 2021, just 13 months after the company’s launch, the company sold out of its FEWO collection, an NFT drop with the artist FEWOCiOUS, in just seven minutes—raising $3.1 million. 

Terms of the acquisition were not announced, but the announcement made a splash across the internet, from people in the NFT world to investors in Nike stock. RTFKT’s CloneX Mintvials, used to mint random CloneX NFT avatars designed in partnership with the Japanese artist Takashi Murakami, have done over $100 million in sales over the last two months, according to CryptoSlam, and over $17.5 million of it came on December 13th, the day the partnership with Nike was announced.

The RTFKT founders were excited about the acquisition by Nike, which has also taken steps toward the metaverse with the 2021 launch of Nikeland, a virtual world on Roblox, along with a number of trademarks issued for the production of virtual Nike wearables back in November, according to CNBC.

“What a journey it has been,” Le tweeted. “When we first started, we had fun designing sneakers inspired by video games and making dope content and always trying to innovate. Nike has always been our inspiration. This is the start of a new chapter in the RTFKT story.”

Pagotto said on LinkedIn that the team had “always looked up to Nike, with the goal to create the Nike born on the Metaverse. Two years later, a new chapter begins, proof that with passion, hard work and the best people, you can achieve anything. Can’t wait for 2022.”

Valisev said on Linkedin that it “feels like a dream,” saying the group started RTFKT “inspired by Nike.”

Nike is not the only company of its type making moves into the NFT space. Just a few days after the RTFKT news, Adidas sold about $22 million in NFTs in a partnership with Bored Ape Yacht Club, PUNKS Comic, and gmoney. In May, the venture capital company Andreessen Horowitz led an $8.2 million investment round in RTFKT, along with influencer Gary Vaynerchuk, the band the Chainsmokers, SpaceX Investor Bill Lee, C-Ventures from Adrian Cheng, a member of China’s wealthiest family, and more.

Le said that the company has had offers from a number of major luxury brands looking to partner with RTFKT, but he felt like they were “cash grab” offers from companies trying to ride the new wave of NFT and crypto technology. “Everybody threw term sheets at us,” Le said.

Pagotto said in a press release that “Nike is the only brand in the world that shares the deep passion we all have for innovation, creativity and community,” adding, “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.”

Since the announcement, RTFKT hasn’t shown any large changes in direction from their previous projects, continuing to develop around their CloneX project. In late December, RTFKT airdropped Space Pods, virtual gallery rooms where people can show off their NFTs and hang out with other Clones, to Clone owners. They’ve also announced plans for future multiplayer features and media embed features in January, pods customization extensions and upgrades in Q1, and more.

“Our roadmap isn’t like your everyday roadmap. Utilities are the core of the RTFKT brand and we are already planning and developing most of them,” RTFKT Studios tweeted in late December.

If RTFKT’s past drops are any indication, there is much more innovation to come.

“The shape of RTFKT’s future remains to be seen. Life in major corporations can be fraught with difficulties. Yet, RTFKT’s founders have shown they understand a world that is still emerging and can operate at the upper levels of that world, which gives them an edge,” Clyde F. Smith, founder of CryptoArtNet, wrote last month

“Since Nike and RTFKT both offer experiences with custom sneaker drops, they do have common ground upon which to work. Given their combined resources, it will be exciting to witness the possibilities that this collaboration can yield beyond wearables into gaming and sports, regardless of the multiverse focus. As it stands, the range of possibilities for RTFKT are broad yet potentially quite exciting.”