Dream Sports-backed cricket NFT startup Rario, founded by Ankit Wadhwa and Sunny Bhanot in 2021, announced a sudden shutdown of its product, causing distress among investors.  The 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 30-40 crore, as per multiple media reports.

This announcement of shut down came into force after the quitting of Co-founders of the company, followed by mass exits of employees. Soon after they announced their official shut down statement have reversed its decision as it continues to reel under headwinds in the NFT and Web3 space. Rario made this announcement on its official X handle.

Previously, in their official statement, the company stated, “As we reflect on the events of the past six months- industry headwinds on account of new regulations in Web 3.0, crash in the NFT sector coupled with management failures, we have not been able to live up to your expectations.”

It also mentioned, “Recognizing the need for change, we have put in place a new management team which will bring about a positive transformation. The newly appointed team has a shared commitment towards steering the business in the right direction. To make this possible, we have to sunset the current Rario product effective January 29, 2024.”

The company said that, it would shut down its current product on January 29 and re-launch in March, with the current cards being unusable on the new platform.

Commenting on the outcry of the investors, the company said that, it 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 148 crore on licensing deals.

The startup, once which had over 700,000 users, turned into a cash-burning entity, spending 600 crore to earn 39 crore and writing off NFTs worth 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.

As the futuristic move, to overcome the turmoil the company has appointed CFO Priyesh Karia as the interim CEO and assured that customers' wallet cash balances are safe until March 31st, 2024.The company will be launching a brand new platform that will enable users to play new and engaging cricket-based games. The new management aims to steer the business in its right direction.

Previously the company raised $120 million led by Dream Capital, Dream Sports’ investment arm, and Alpha Wave Global. Rario also turned out to be a cash burning machine in FY23 as it spent around 600 crore to earn 39 crore. The firm also wrote off NFTs worth 458 crore in the last fiscal year.

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