According to the most recent report, the world's largest NFT marketplace, OpenSea, has experienced a significant decline in its valuation, plummeting by a staggering 90% as one of its major supporters withdraws a substantial investment.
Coatue Management, an investment manager with a focus on technology, has markedly reduced the value of its holdings in OpenSea by nearly 90%, as disclosed in documents examined by The Information.
During the second quarter of 2023, Coatue downsized its previously assessed $120 million investment in the NFT platform to $13 million. This substantial reduction suggests that OpenSea's current valuation is now estimated to be at $1.4 billion or even lower. Additionally, Coatue also underwent a similar 90% devaluation in its stake in the web3 infrastructure company MoonPay.
This undisclosed devaluation underscores how venture investors are reassessing the value of their investments made during the peak of the cryptocurrency boom, given the significant downturn in the market. In the early part of the preceding year, OpenSea had achieved a valuation of $13.3 billion following a funding round jointly led by Coatue and Paradigm.
OpenSea had achieved a valuation of $13.3 billion in the previous year after securing $300 million in Series C funding, in which Coatue Management was a co-lead investor. However, as the cryptocurrency market entered a bearish phase, OpenSea shareholders began selling their shares. Additionally, the NFT market didn't keep pace with the cryptocurrency market rally in 2023.
On November 3, CEO Devin Finzer made a significant announcement regarding the company's strategic shift towards improving technology, reliability, speed, quality, and the overall user experience. In line with this, OpenSea decided to reduce its workforce by 50% across all departments. Finzer also noted that the restructured OpenSea team would adopt a flatter hierarchy with fewer middle managers.
Despite the challenges, OpenSea is still making notable changes to its platform. Recently, the NFT marketplace introduced OpenSea Studio, which enables creators to easily initiate and manage their NFT projects. Within OpenSea Studio, users can seamlessly generate NFTs directly into their own wallets, expanding their creative possibilities. This adaptable platform is also compatible with various blockchains supported by OpenSea, fostering an inclusive and flexible environment for creators.
