Line an 8x8-inch square dish with parchment paper and set aside.

Pour the sweetened condensed milk, white chocolate chips, and Funfetti cake mix into a medium pot. Stir to combine.

Heat over medium low heat to melt the chocolate chips, stirring frequently. Remove from heat when the chocolate has completely melted and the mixture starts to come together in a ball in the center of the pot.

Stir in the vanilla extract and rainbow sprinkles. Transfer the fudge to the prepared pan and use a spatula to smooth it out in the pan. Sprinkle the top with additional sprinkles, if desired.

Refrigerate at least 2 hours before cutting and serving. Store in an airtight container in the refrigerator.