Coatue Management, a prominent U.S. technology investment firm, has significantly devalued its investment in the nonfungible token (NFT) marketplace OpenSea. The Information, having accessed relevant documentation, reported on November 7 that Coatue slashed the valuation of its stake from $120 million to a mere $13 million. This adjustment suggests a stark reduction in OpenSea’s valuation, now estimated at around $1.4 billion.
The investment firm similarly reduced its position in the Web3 payment service MoonPay by the same percentage.
In a Series C funding round in January 2022, OpenSea secured $300 million, with Coatue Management and crypto-focused venture firm Paradigm leading the charge. At that time, this financing event placed OpenSea’s value at an impressive $13.3 billion.
However, in the face of a persistent bearish trend and dwindling NFT trade volumes over the past year, OpenSea declared on November 3 that it would cut its workforce by half. This downsizing is part of a broader initiative to reinvent itself as OpenSea 2.0. According to CEO Devin Finzer, this revamped version will prioritize technological enhancements, as well as increased speed and reliability. Finzer believes that a leaner team will contribute to OpenSea’s agility and responsiveness.
Back in August, OpenSea had faced backlash for discontinuing its operator filter feature, which had allowed creators to block marketplaces that did not honor royalty agreements.
Coatue’s markdown arrives at a time when NFT trading volumes have markedly decreased. The industry hit its zenith in 2021, with sales surpassing $14 billion. Since March 2022, however, there has been an approximately 80% fall in trading activity.
Despite this downturn, a sliver of optimism appeared in a November 3 report from DappRadar, a crypto analytics firm, which observed the NFT market’s first monthly increase in over a year, marking an uptick of $99 million in October compared to the previous month.
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