Move over Bored Apes, there’s a new NFT collection making waves in the market. The Igloo Co, in partnership with Walmart, is selling stuffed toy versions of cute aquatic birds called Pudgy Penguins. These plushies are flying off the shelves at over 3,000 Walmarts, Amazon, and Ebay, despite the fact that their virtual counterparts are selling for as much as $500,000 on crypto marketplaces.
Launched in 2021 by four college friends, Pudgy Penguins quickly gained popularity for their vibrant colors, small beaks, and adorable round faces. However, the initial success was short-lived as NFT prices started declining and the community became disillusioned with the founding team’s management. This is where Luca Netz, a serial entrepreneur known for helping influencers capitalize on their fame, saw an opportunity.
Netz purchased the copyright ownership and creator addresses of Pudgy Penguins for $2.5 million in 2022 and set out to revitalize the brand. He secured a $9 million seed round, focused on building the Pudgy Penguin brand beyond NFT enclaves, and partnered with retailers like Walmart, Five Below, and Macy’s to bring the merchandise to physical stores.
One key innovation by Netz was to share royalties from the physical toys and plushies with the NFT owners. By licensing out the rights from the holders of the corresponding NFTs, owners of popular Walmart Pudgy Penguins earn a 5% royalty on net revenues. This unique approach has contributed to the success of the NFT collection, with the floor price of Pudgy Penguin NFTs soaring since the retail launch.
With more than $800 million in Pudgy Penguin NFT sales since Netz took over, the brand has become a masterclass in brand building. The company’s presence on platforms like Instagram, TikTok, and Giphy has also contributed to its success, with plans for expansion into other retailers like Target and Walgreens.
In a market where NFT royalties are becoming unsustainable, Netz’s approach to sharing royalties from physical merchandise with NFT owners has set a new standard. By allowing NFT holders to license their intellectual property for physical products, Pudgy Penguins has created a unique and profitable ecosystem for its community of collectors.
Luca Netz and The Igloo Co’s success with Pudgy Penguins has proven that it’s possible to merge the physical and digital worlds of collectibles, creating a profitable and innovative model in the world of NFTs. As the brand continues to grow and expand, it remains a shining example of how to build a successful NFT collection in today’s market.
