Funko on the Brink of Collapse: Pop Culture Empire Admits It Might Shut Down Within a Year After Massive Financial Meltdown

Funko, the company behind the iconic Pop! collectibles, has issued a shocking warning to investors, revealing there is “substantial doubt” about its ability to survive the next twelve months. The company, once a pop culture powerhouse, reported staggering losses and admitted it may not be able to meet its loan obligations if conditions do not improve soon.

In its latest SEC filing, Funko disclosed that despite some improvement in quarterly figures, its overall financial health remains unstable. The company faces declining sales, mounting debt, and a shrinking retail environment, leaving fans and collectors worried about the future of the beloved brand.

Funko’s Financial Freefall Raises Alarms Across the Industry

Funko’s Q3 financial report revealed losses just under $1 million, following a devastating $41 million loss in Q2. Although the reduction in loss suggests slight recovery, it’s still a far cry from the $8.9 million profit the company enjoyed in the same period of 2024. Revenue also plummeted year-over-year, from $292.8 million to $250.9 million, largely due to declining U.S. market performance.

The company attributed its struggles to a “challenging retail environment,” where stores are cutting back on restocking and canceling orders. Rising tariffs have further hurt profitability by driving up costs and lowering consumer spending. Funko’s excessive number of licenses—from Marvel and DC to Stranger Things and The Muppets—has also become a financial strain as consumer interest wanes and storage costs soar.

According to CEO Josh Simon, who took the role just two months ago, Funko is working to streamline its product lines and adapt its business model. “Our Make Culture POP! strategy is all about being at the center of the moments everyone is talking about,” Simon said. “We’re expanding into new fandoms and launching smaller, more focused lines like Bitty Pop! to support growth.”

Funko’s Possible Sale and the Netflix Lifeline

Funko is exploring strategic alternatives, including a possible sale of the company, to stay afloat. Despite the grim financial picture, the company remains optimistic about its collaboration with Netflix. Its upcoming “KPop Demon Hunters” partnership aims to bring new life to Funko’s brand during the 2025 holiday season, potentially reviving sales among collectors and new audiences alike.

Funko’s Bitty Pop! mini line has already shown promise, earning a spot on Walmart’s 2025 Top Toy List. However, whether this small success can offset the company’s broader financial crisis remains uncertain. The company’s survival may depend on its ability to pivot quickly and regain consumer enthusiasm before the year ends.

As Funko faces the toughest chapter in its history, the pop culture world waits anxiously to see whether the brand that turned fandom into an empire can find its way back—or fade into nostalgia.

FYI (keeping you in the loop)-

Q1: Why is Funko facing potential collapse?

Funko’s financial troubles stem from declining sales, loan obligations, and rising tariffs that hurt profits. The company also overextended into too many licensed products.

Q2: How much did Funko lose in 2025?

Funko reported a $41 million loss in Q2 and another $1 million loss in Q3, marking a drastic drop from its $8.9 million profit in 2024.

Q3: Could Funko really shut down?

Yes, the company warned in its SEC filing that there is “substantial doubt” it can continue operating beyond the next twelve months without major changes.

Q4: What steps is Funko taking to recover?

The company is reducing product lines, focusing on smaller collections like Bitty Pop!, and banking on Netflix collaborations to revive sales.

Q5: Is Funko considering selling the company?

Yes, Funko confirmed it is evaluating several strategic options, including the possibility of a sale to stabilize finances and protect shareholders.