The Utah County tech firm partnering with Brigham Young University on an NFT marketplace has cut its workforce by about half and closed its office, according to CEO Jon Cheney.
But with an increased focus on developing NFTs, Ocavu is “still going strong,” including “currently receiving some major buyout offers,” Cheney told The Salt Lake Tribune.
“We just let underperformers go, was all,” he said, adding that tech companies often “optimize” their workforces. Ocavu shifted from 43 or 42 employees, he said, down to 34 and now down to 22, with layoffs in June, September and October.
The company moved out of its office space in the Younique Products building in Lehi earlier this month.
NFTs (non-fungible tokens) are essentially digital trading cards, and BYU players can choose to participate under NIL deals — which allow student athletes to earn money for uses of their name, image and likeness.
Ocavu and BYU announced their five-year partnership in August, with Cheney predicting it could be worth up to $20 million in its first year.
Jim Rampton, a former Ocavu employee who said he was laid off with “maybe four or five” others in September, said employees were told “that the budget was too tight” and that the layoffs were not based on performance.
Rampton said he had been with the company for two and a half years. Ocavu “was doing really, really well a year ago at this time,” focusing on augmented reality, he said.
A company has a product such as “a table or a couch, et cetera, and we’d make a 3D model of it,” Rampton explained, “then the client could put that link on their website,” and viewers can see it in 3D using a phone or tablet.
Latter-day Saint influencers Brooklyn and Bailey McKnight, for example, used Ocavu’s augmented reality platform as part of their August launch of ITK (In The Know) skin care products. A QR code allows Walmart shoppers to virtually take the products out of their packaging and examine them.
Ocavu’s roots are in augmented reality; it grew out of the treasure hunting app Seek, which added AR features after the success of Pokemon Go, TechCrunch reported in 2017. In that interview, Cheney said Seek was shifting to become a hub for developers to post AR projects.
In May, rebranded as Ocavu, the privately held company announced its new Ocavu Network for NFTs and a crypto token.
And in August, Ocavu and BYU announced the CougsRise.com marketplace for buying and trading NFTs of players, relics (such as trophies) and moments. Cheney has declined to disclose the percentage of the payments that are kept by the players, BYU’s athletic department and Ocavu.
In an August article for Utah Business magazine, Cheney said the company’s revenue projection for 2022 was $22 million.
“We’ve decided to redirect our business model from a 20 percent blockchain focus to 50 percent,” he wrote then, “letting crypto and NFTs share the spotlight with our virtual and augmented reality technologies.”
Some resources have been diverted away from augmented reality toward NFTs, Rampton said, as Ocavu invested in developing the blockchain technology it relies on. “I felt like that was a really big gamble,” Rampton said.
Ocavu said it has already spent $2 million in making the current BYU NFTs, and will likely spend $2 million more next year.
But Cheney said Ocavu has “balanced now,” with the company’s remaining staff focused about 60% on augmented reality and 40% on the cryptocurrency and NFTs. “We were extra heavy on the [augmented reality] side,” Cheney said.
Some experts said they viewed the BYU partnership as risky at the time the deal was announced, due to the volatile market for NFTs. NFT sales dropped 60% between the second and third quarter of the year.
The value of Ocavu’s cryptocurrency, the Ocavu Network Token, also took a hit recently; over the past two weeks, it’s down 48.5%.
Most of that drop was concentrated in a few days after a large sell-off of a major coin owner. The nature of cryptocurrency allows for a record of all transactions to be viewed publicly, though the user handles lack identifying information.
Asked about that sale, Cheney said, “I haven’t sold anything.” He added, “I can tell you for a fact that none of the founders have sold any of their airdrop tokens” — referring to tokens company employees receive automatically as a perk of their tenure or holdings.
However, Cheney continued, recently “one of our top investors decided to sell all of his tokens … I have no idea why.”
The Ocavu token is separate from the BYU NFT deal, he emphasized, and “doesn’t impact our ability to deliver.”
BYU did not respond to The Salt Lake Tribune’s requests for comment.
The NFTs that BYU fans can purchase and swap on Cougsrise.com are also tied to experiences. For example, a fan who is among the first to acquire all the NFTs in a certain collection might get free Cougartail treats, or might get to fire the George Q. Cannon at a football game. The platform is also hoping to become a hub of communication for BYU fans.
Fans have left enthusiastic comments on the site’s home page about the NFTs they’ve bought and their experiences. One user wrote, “thanks Cougs Rise for the great experience I had with the field pass to watch warmups against Wyoming. Such a memorable experience.” Another posted, “excited to see the next drop.”
Leto Sapunar is a Report for America corps member covering business accountability and sustainability for The Salt Lake Tribune. Your donation to match our RFA grant helps keep him writing stories like this one; please consider making a tax-deductible gift of any amount today by clicking here.