OpenSea’s market value drops 90% in less than a year

The market value of NFT trading platform OpenSea has plummeted 90% since the beginning of the year, according to a recent report. In January 2023, the platform was valued at US$14.4 billion, or around R$70 billion in current values. However, the platform’s current valuation is just US$1.3 billion, around US$6.8 billion.

This sharp drop occurred after one of OpenSea’s largest pulled back a massive investment. Coatue Management also reduced its stake in the company by 90%, which generated severe losses.

Participation cut

Coatue is a technology-focused investment manager that invested US$120 million in OpenSea. However, the company reduced this investment by almost 90%, keeping just US$13 million on the platform, as revealed by the website The Information.

This reduction in investment occurred in the second quarter of 2023 and one of the reasons was the drop in cryptocurrency prices. Additionally, Coatue also reduced its stake in web3 infrastructure company MoonPay by 90%.

This reduction highlights how venture capitalists are reassessing the value of their investments made during the peak season in 2021. With the end of this trend in 2022, companies began to reduce risky investments, affecting the companies’ valuation.

Earlier last year, OpenSea realized a $13.3 billion valuation following a funding round jointly led by Coatue and Paradigm. At the time, the platform received US$300 million in investments in the Series C round.

Tough times for OpenSea

On November 3, CEO Devin Finzer revealed a significant development within the company. At the time, OpenSea made the decision to reduce its workforce by 50% across all departments. Additionally, Finzer mentioned that the restructured OpenSea team would have a flatter hierarchy, with fewer middle managers.

The objective was to streamline the company’s structure and reduce costs to face the downturn. Other companies also made cuts to their workforce, aiming to face the challenging time in terms of valuations.

Despite all the challenges, OpenSea continues with new changes to the platform. Last month, the platform launched OpenSea Studio to allow creators to easily launch and manage their projects. In other words, in addition to intermediating sales, the company also wants to serve as a launch platform for artists.

Within OpenSea Studio, users can effortlessly generate NFTs directly in their own wallets, expanding their creative horizons. Additionally, this versatile platform offers compatibility with a variety of OpenSea-supported blockchains, creating an inclusive and flexible space for creators.