Investment giant Coatue Management has drastically reduced its valuation of NFT marketplace OpenSea, signaling a pessimistic outlook for the once-booming sector.
Coatue Management, a prominent United States tech investor, has devalued its stake in the nonfungible token (NFT) platform OpenSea by a staggering 90%. This adjustment took place on November 7, plummeting the investment value from $120 million to a mere $13 million.
The markdown by Coatue suggests an on-paper valuation of OpenSea at roughly $1.4 billion. This move mirrors a similar markdown of the firm’s investment in Web3 payment provider MoonPay, also by 90%. In January 2022, OpenSea had achieved a valuation of $13.3 billion after raising $300 million in a Series C funding round, which had been co-led by Coatue along with crypto venture capital firm Paradigm.
Following a persistent bear market and a decline in NFT trading activity, OpenSea announced a significant workforce reduction on November 3, aligning with plans to launch “OpenSea 2.0.” OpenSea CEO Devin Fizner stated that the revamped platform will emphasize technological enhancements, faster service, and better quality. He believes a leaner team will keep the company “nimble and attentive.”
The decision by Coatue arrives amidst a downturn in NFT trading volumes, which have plummeted by 80% since March 2022. Although the sector experienced over $14 billion in sales in 2021, its popularity has been waning. Nonetheless, a recent report from DappRadar on November 3 showed a $99-million month-over-month increase in NFT market gains for October, marking its first rise in over a year.
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