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OpenSea Investor Reduces Valuation by 90%: Report

BY Andrew Rossow

November 08, 2023

Coatue Management, a U.S. tech investment firm, has recalibrated the value of its holdings in the NFT marketplace, OpenSea, according to recent documents seen from The Information

This reevaluation comes amidst a pronounced downturn in the NFT industry, with Coatue slashing its OpenSea investment from $120 million to just $13 million. This adjustment suggests that OpenSea’s current valuation hovers around $1.4 billion, a steep descent from the $13.3 billion valuation it attained following a $300 million Series C fundraising round in January 2022 from both Coatue and venture capital firm Paradigm. 

The bear market’s tenacity has not only affected investor sentiment but has also led to strategic shifts within OpenSea itself. On the back of waning NFT trade activity and following a 50% workforce reduction announced on November 3, OpenSea CEO Devin Finzer has highlighted plans for the company’s metamorphosis into OpenSea 2.0. The revamped platform aspires to enhance its technological framework while streamlining operations, with Finzer noting the importance of a smaller, more “nimble and attentive” team to achieve these goals.

However, OpenSea’s biggest challenges revolve around losing market share to competitors like Blur, creator royalties, and the impact it has already had on many of the marketplace’s biggest NFT collections. 

OpenSea, however, is not the sole recipient of Coatue’s markdowns, as the firm has mirrored this approach with its investment in MoonPay, an industry-leading payment service provider that makes it easier to transact with fiat and crypto. This trend underscores the sector’s contraction, a far cry from the NFT market’s heyday in 2021, which boasted over $14 billion in sales.

Market analyses underscore the decline, with a dramatic 80% drop in trading volumes since March 2022.

However, despite the pervasive downtrend and the controversy OpenSea faced in August over retiring a feature that allowed creators to enforce royalties, there’s a glimpse of recovery. 

According to a Nov. 3 report from DappRadar, the NFT market experienced its first month of gains in a year during October, with an increase of $99 million compared to the previous month.

Ultimately, investment firms like Coatue are repositioning their assets in response to the changing landscape, while platforms like OpenSea are reevaluating their business models to adapt to the market’s new dynamics, including the recent convictions of the fallen FTX founder Sam Bankman-Fried. 

Editor’s note: This article was written by an nft now staff member in collaboration with OpenAI’s GPT-4.

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