OpenSea raises another 300 million U.S. dollars, extinguishing user airdrop dreams

On January 4, OpenSea, the world’s largest NFT trading platform, announced that it had achieved a C round of 300 million US dollars financing with a post-investment valuation of 13.3 billion US dollars. The lead investors were Paradigm and Coatue, and the lead investors in the A and B rounds were a16z. Did not appear in the C round of financing announcement.

OpenSea, established in 2017, focuses on the non-homogeneous token NFT trading market. It started from the conceptual period of blockchain applications and broke out in the NFT development boom in 2021. It took 4 years to become a valuation of 13.3 billion. U.S. dollar crypto industry unicorn company.

After OpenSea announced a new round of financing, users have aroused strong indignation. People predict that the platform is not far from the IPO plan. Although IPO is the capital operation choice of any unicorn company, users of OpenSea have been expecting the platform to issue their own encrypted tokens and enter the sequence of the encrypted asset market, not the stock market.

OpenSea’s main profit method is to charge transaction users a fee. In 2021 alone, the transaction volume of the platform has increased by more than 600 times.

According to the expectations of users, OpenSea, which captures profits from NFT transactions generated on the blockchain, should develop in the direction of applications in the Web3 era. It can return the management rights of data and assets to users, and allow users to share platform benefits instead of going. The Web2 financing method of traditional Internet companies-relying on traffic to attract capital, and finally make institutional capital monetize from the stock market.

As early as December of last year, OpenSea executives’ IPO ideas once angered community users, and once led a certain NFT community to set up an OpenDAO organization under this name and issue a coin for OpenSea.

After the C round of financing, the market’s expectations for OpenSea’s IPO have increased. Although the CFO of the platform has stated that it will consider the suggestions of community users, the actual action is to lower the expectations of users who are waiting for OpenSea to issue tokens.

Traditional institutions dominate OpenSea Series C financing

In the four years since its establishment, OpenSea has completed a new round of US$300 million in financing. Only half a year has passed since this round of financing, and the valuation has risen from 1.5 billion U.S. dollars in the B round of financing last year to 13.3 billion U.S. dollars.

OpenSea’s latest financing announcement only disclosed lead investors Paradigm and Coatue. The former Paradigm focuses on the encryption industry and Web3. It is what the crypto circle calls “New Money” and is a new investor in the history of OpenSea financing.

It is worth noting that the latter Coatue, which is OpenSea’s Series B financing party, ranked behind a16z in the financing news at the time. This institution was originally a veteran hedge fund established in 1999. Later, it gradually focused on equity investment in the public market, including technology, media and telecommunications industries.

In 2021, Coatue’s investment events include China’s new energy vehicle developer “Ziyoujia”, and VR interior design platform “Kujiale”. In the past two years, Coatue’s investment focus has begun to turn to the blockchain business. It is also an investor in smart contracts and blockchain ecological security service provider “Certik”.

OpenSea’s most high-profile investor, a16z (Andreessen Horowitz), did not appear in the C round of financing announcement. This institution was the lead investor in OpenSea’s A and B rounds of financing in 2021. In its lead investment, OpenSea successively Raised US$2,300 and US$100 million, bringing the world’s largest NFT trading platform to a valuation of US$1.5 billion after the B round of financing.

OpenSea raises another 300 million U.S. dollars, extinguishing user airdrop dreams

OpenSea’s financing history

In the past 4 years, OpenSea has conducted more than 5 rounds of financing. There are not only institutions such as Blockchain Capital and a16z, but also actor Ashton Kutcher, who is deeply involved in the NFT field, and NBA Dallas Mavericks owner Mark · Celebrities like Mark Cuban, most of them are representatives of “New Money” in the related crypto industry. But by the C round of financing, traditional institutions have become one of the investment leaders.

Whether a16z will withdraw from this round of OpenSea financing is unknown, but Coatue has reappeared in the C round of financing. Once this capital, which is also a private equity fund (PE) and hedge fund, intervenes, it is hard not to be reminiscent of it. OpenSea’s IPO plan.

For users in the NFT community, “OpenSea wants an IPO” is a no-no. In their eyes, this platform, which is developed by relying on NFT transactions on the service chain, can reach the world’s most inseparable from the massive contributions of users. Its users have been expecting that it can develop in the direction of Web3 and DAO (Decentralized Autonomous Organization), by issuing governance tokens, so that users who contribute fees can enjoy its development dividends.

However, rounds of equity financing have gradually shattered users’ “OpenSea currency issuance dreams.” After the announcement of the C round of financing, OpenSea’s official Twitter flooded with angry users, asking whether it would still issue coins, others denying it is a Web3 product, and others calling on NFT colleagues not to trade on this platform.

Will OpenSea head towards an IPO?

The keyword “IPO” came from within OpenSea, borrowed from its new CFO.

Last December 6th, OpenSea ushered in its first Chief Financial Officer (CFO) Brian Roberts (Brian Roberts). In 2014, Roberts served as the first CFO of Lyft, the second largest ride-hailing app in the United States, and led the company to complete a multi-billion-dollar initial public offering (IPO). Before joining Lyft, he held important executive positions at Microsoft and Walmart.

This was originally an important appointment for OpenSea to “expand the company and serve the community”, but once Brian Roberts took office, there was speculation in the NFT community that he would take OpenSea to the IPO road.

Speculation quickly received a response in the media. Roberts said in an interview with Bloomberg, “When your company grows so fast, it’s foolish not to consider going public.” He also added that due to OpenSea’s rapid growth and profitability, IPOs will be actively welcomed by the public market. .

This remark angered the users who were waiting for OpenSea to issue encrypted tokens, especially the user groups who contributed a lot of fees to this NFT trading platform and helped it develop and grow. They hoped that OpenSea would issue their own tokens to raise funds. This method of raising funds was widely used in DeFi’s start-up and established projects last year. Some users believe that if OpenSea abandons airdrops and conducts an IPO, it is a betrayal of the community that helps its development.

However, Roberts said the company itself does not need more cash, but needs to raise funds for partners, acquisitions and joint ventures. As a result of community dissatisfaction, Roberts later clarified on Twitter that “the report on the OpenSea plan is inaccurate. Let me clarify: there is a big gap between thinking about what an IPO will look like in the end and actively planning an IPO.” He added Said that the company does not intend to conduct an initial public offering, but if it does, it will want to involve the community.

How can the user community participate in a company’s IPO? Roberts did not elaborate. Users who can’t wait for OpenSea to issue tokens take the lead.

On December 24, 2021, NFT collectors “9x9x9” created the OpenDAO  project under the name of DAO , and conducted an airdrop of governance token SOS for OpenSea trading users, which brought the last game of 2021 Large-scale token airdrops and Meme-like hype sent SOS to the secondary market of encrypted assets.

OpenSea raises another 300 million U.S. dollars, extinguishing user airdrop dreams

SOS trend in the past 2 weeks

SOS has been in the market for 2 weeks, from the initial $0.0000014 to the highest soaring to $0.000011, the highest increase is 685%, and now the distance to the highest point has been cut in half. Not to mention what it left behind, it is probably the user’s performance art like a counterattack to the OpenSea IPO plan, which shows the real expectations of users for the platform native to the encryption industry.

Now that OpenSea has achieved a C round of financing, it is highly probable that it will not be its last round of financing.

With reference to Coinbase, the first stock in the crypto industry, this crypto asset trading platform was listed on the U.S. stock market in April last year. From 2013 to 2020, it has experienced 17 rounds of financing in 7 years, totaling US$547.3 million, and finally moved towards an IPO. In contrast, OpenSea’s financing amount and process have gone faster.

What’s interesting is that both platforms have the capital side a16z. The institution led the US$25 million Coinbase round of financing. In OpenSea’s A and B rounds of financing, the total amount of financing led by the institution has already been invested. Reached 123 million U.S. dollars, which also revealed that capital favors the practical and more transformable NFT market.

From the statement of OpenSea CFO Roberts that “OpenSea does not intend to conduct an IPO”, the platform may not be IPO at present, but the possibility of the future is not ruled out. He also buried a foreshadowing expression “if any” for the community. In this way, users who are waiting for OpenSea to issue coins may not escape the ultimate disappointment.

The potential and challenges of OpenSea

Since the outbreak of the NFT market in 2021, the application of non-homogeneous tokens is actually still in the early stage of the market, the on-chain infrastructure is not rich enough, and the scenarios and types of use still need to be further innovated and expanded.

According to data from the third-party data service provider OKLink, as of January 4, global NFT-related product sales were US$183 million. Collectibles are still the main category of NFT sales, followed by virtual world and game-related NFT scenarios. As of January 5, the total market value of related NFT cryptocurrency projects on Coingecko was 48.5 billion U.S. dollars, accounting for only 2% of the total market value of the crypto asset market.

With more traditional commercial entities participating in fields such as encrypted art, encrypted collections, Metaverse, games, etc., there is still a lot of room for development in the NFT market. This is where OpenSea has the potential to continue to expand its market size.

Currently, the NFT products available for trading on OpenSea include 9 categories of art, collectibles, domain names, music, photography, sports, trading cards, utilities, and virtual worlds. Just as the platform announced the C round of financing on January 4, OpenSea’s daily NFT transaction volume surged to 255.8 million U.S. dollars, close to the record of 322 million U.S. dollars set at the end of August last year.

OpenSea raises another 300 million U.S. dollars, extinguishing user airdrop dreams

OpenSea NFT categories available for trading

In December of last year, OpenSea’s monthly transaction volume was as high as US$3.24 billion, which was only 5.3% short of the platform’s peak of US$3.42 billion in August. In just 4 days from 2022, the transaction volume of the platform has exceeded 700 million US dollars. Some media predict that in the first month of the new year, OpenSea’s monthly transaction volume is likely to hit a new high.

The performance of the data plane shows that whether OpenSea is issued or not will not prevent it from moving to a larger scale, but it is also facing a crossroads-whether to prepare for the Web 3 era or to eat the Internet at present The dividend of the transition from Web2 to Web3?

IPO or not is not the fundamental basis for judging whether OpenSea is a Web2 product or a Web3 application. Since its creation, this platform has naturally built a wallet system to provide services for users who love NFT, which is one of the manifestations of its Web3 features.

According to the professional’s definition of Web3, the future Internet should be a network where users control data and users control the value of data. Blockchain is one of the ways to realize this vision. It allows users and merchants to access the network and use it without censorship. People can control their own digital assets and products through the wallet, and related creation, transaction and other data are recorded on the chain that cannot be tampered with, because the data storage of the blockchain does not need to rely on a centralized server, and the data is stored synchronously by decentralized network nodes write.

In this way, OpenSea is not enough for Web3, it is not built on the chain, but the NFT products sold through it come from the chain. Taking a long-term perspective, such an NFT trading platform is not without the possibility of being replaced. DeFi is an example. The daily trading volume of the decentralized trading application Uniswap has surpassed the centralized trading platform Coinbase many times.

There has been a decentralized NFT trading platform. Mintable is one of OpenSea’s competitors. Although its transaction volume is not yet dominant, it is managed by the decentralized autonomous organization DAO, which is more in line with the business platform of the Web3 era. characteristic. Especially when there is no hope for OpenSea to issue coins, crypto users may begin to consider platforms that are more decentralized and more willing to listen to user needs.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/opensea-raises-another-300-million-u-s-dollars-extinguishing-user-airdrop-dreams/
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

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