A report suggests that an investor in OpenSea has reduced the valuation of their stake in the platform by 90%.
Coatue Management, one of OpenSea's leading investors, has reportedly reduced the valuation of its investment in the platform from $120 million to $13 million.
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Coatue Management, a tech investment firm based in the United States, has reportedly devalued its stake in the nonfungible token (NFT) platform OpenSea by 90%. According to a document reviewed by The Information on November 7, the investment in OpenSea has been reduced from $120 million to $13 million, suggesting an on-paper valuation of approximately $1.4 billion for OpenSea.
In a similar move, Coatue Management also devalued its investment in MoonPay, a Web3 payment provider, by 90%. In January 2022, OpenSea conducted a Series C funding round, raising $300 million, with participation from crypto venture capital firm Paradigm and Coatue Management. The substantial investment at that time placed OpenSea's valuation at $13.3 billion.
Following a prolonged bear market and a decline in NFT trading activity over the past year, OpenSea announced a 50% reduction in its workforce on November 3 as part of its plan to rebrand as OpenSea 2.0. OpenSea's CEO, Devin Finzer, mentioned that the revamped platform would focus on improving its technology, speed, and overall quality, and that a smaller team would help the platform remain agile and responsive to market demands.
OpenSea had faced criticism in August when it announced the retirement of its operator filter feature, which allowed creators to blacklist non-royalty-enforcing marketplaces.
Coatue's decision to devalue its stake comes in the context of a slump in NFT trading volumes. The NFT sector reached its peak in 2021, with over $14 billion in sales for the year. However, NFT popularity has waned since then, with overall trading volumes declining by 80% since March 2022.
NFT trading volumes grew slightly in October, hinting at a possible trend reversal. Source: DappRadar
While NFT trading volumes saw slight growth in October, there are signs that the market may be beginning to stabilize. According to a report from crypto data firm DappRadar on November 3, the NFT market recorded its first month of gains in over a year, with a $99 million increase in trading volume in October compared to the previous month.
