Funko, the toy company best known for its omnipresent Funko Pop figurines, is in a cash crisis, and may not have the operating capital to stay in business for another year. In the company’s latest SEC filings (via Mashable), it says that the future is in “serious doubt” as a result of a sales decline.
Funko cited a “challenging retail environment,” pointing to things like steeply increasing tariffs that make it more difficult to turn a profit, and contributing to decreased orders since retailers don’t want to take risks. The debt-laden company is trying to raise capital to meet its current obligations, but warns that if things don’t improve, they might end up defaulting on loans.
“There is substantial doubt about the Company’s ability to continue as a going concern for the next twelve months,” said Funko’s filing, citing over $240 million in debt.
Funko’s financials indicated that global and domestic sales dropped 14.3 percent and 20.1 percent respectively year-over-year for the third quarter. It’s a downward trend that had already been raising eyebrows, after reports that $35 million worth of stock had been dumped into a landfill in 2023, as it was more cost effective to write off the loss than to pay for storage.
The company has been around since the ’90s, but it exploded in popularity after the Funko Pop! line rolled out in 2011. The simple, chibi-inspired design was infinitely customizable, allowing the company to make figurines inspired by dozens of brands, including TV shows, movies, comics, and video games. Properties that didn’t usually get toys — like Cheers, Friends, and General Mills’s “monster cereal” mascots — could suddenly find shelf space in places like Walmart and Hot Topic.
Funko Pops run hot and cold with consumers, with some adoring the simple design and others hating them. But with a relatively low price tag and infinite customizability, the figurines became one of the most ubiquitous products in all of retail, showing up in most major retail stores throughout the 2010s and 2020s.
Over the last few years, though, it seems like more and more dead stock and fewer and fewer big hits. This year, for instance, Funko is seeing big demand for KPop Demon Hunters Pops, but that’s about the only bright spot in their current situation.
The decline of superhero movies and other geek media in recent years likely contributed to Funko’s woes. It’s easy to imagine the company sold a lot more toys for Guardians of the Galaxy or Avengers: Endgame than they did for The Marvels or Captain America: Brave New World.
The world is growing up.
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