Coatue Management, the prominent U.S. tech investment firm, has notably adjusted the valuation of its stake in the nonfungible token (NFT) platform OpenSea, marking it down by an impactful 90%.
According to information disclosed on November 7, as reported by The Information, Coatue revised its initial investment from $120 million to $13 million. This adjustment suggests that OpenSea’s on-paper valuation has now reached $1.4 billion.
Notably, Coatue has also applied a similar 90% markdown to its investment in Web3 payment provider MoonPay.
In January 2022, OpenSea secured a substantial $300 million in a Series C funding round, led by crypto venture capital firm Paradigm and Coatue. At that time, the NFT platform garnered a valuation of $13.3 billion.
In response to a persisting bear market and a prolonged decline in NFT trading activity, OpenSea revealed a significant restructuring plan on November 3, involving a 50% reduction in staff as part of its initiative to relaunch as OpenSea 2.0.
OpenSea’s CEO, Devin Fizner, emphasized that the new platform iteration will prioritize technological enhancements, speed improvements, and overall quality. Fizner sees the benefits of a streamlined team, allowing the platform to remain “nimble and attentive.”
In August, OpenSea faced scrutiny for retiring its operator filter, a feature enabling creators to blacklist non-royalties enforcing marketplaces.
Coatue’s decision to mark down its investments coincides with a broader downturn in NFT trading volumes. The NFT sector, which peaked in 2021 with over $14 billion in annual sales, has experienced an 80% decrease in overall trading volumes since March 2022.
A November 3 report from crypto data firm DappRadar revealed a noteworthy development, indicating the NFT market’s first month of gains in over a year, with a month-over-month increase of $99 million recorded in October.