OpenSea Raises $ 100 Million at $ 1.5 Billion Valuation for NFT Market
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OpenSea has raised $ 100 million worth $ 1.5 billion from A16z to scale its open non-fungible token (NFT) market.
New York-based OpenSea said it had become the largest digital marketplace for crypto collectibles and NFTs. It sells NFTs, which are uniquely identifiable digital items that can be authenticated through blockchain, the transparent and secure digital ledger behind cryptocurrencies.
Andreessen Horowitz, also known as A16z, led the second round of institutional funding, with the participation of angel investors, CAA co-founder, Michael Ovitz, and actor-investor Ashton Kutcher. The amount of funding means that the OpenSea is a unicorn, or a startup with a valuation of $ 1 billion, 1.5 times more. It is one of 900 unicorns valued at $ 3 trillion cumulatively.
With this capital, OpenSea will continue to evolve its NFT platform, immediately focusing on hiring engineering talent, expanding internationally to new markets and audiences, and overall creating more resources for users. to easily access, buy and sell digital assets.
Devin Finzer, CEO of OpenSea, said in an interview with GamesBeat that we are experiencing one of the biggest fundamental changes the internet economy has seen in decades, and he’s proud to have led it for quite some time. now as what he considers the best user experience and entry point for NFTs.
“Fundraising is really all around the widespread adoption of NFTs,” Finzer said. “And it’s about developing the platform that we’ve built, which has seen significant volume growth in the last half of the year. We think NFTs really are one of those paradigm shifts every two decades, which is incredibly exciting. “
Kathryn Haun, general partner at Andreessen Horowitz, said in a statement that the OpenSea team realized early on the need for a cross-blockchain marketplace where anyone could buy, sell and create Digital NFTs.
The new funding injection comes as OpenSea NFTs expand to a wider audience and represent a whole new economy based on digital ownership. Today, OpenSea is the largest marketplace for NFTs, representing gaming merchandise, digital art and collectibles, event tickets, domain names and millions of other assets backed by blockchains.
Expansion to a polygon without gas
Previously, OpenSea was limited to Ethereum, the popular cryptocurrency platform that has been criticized for using a lot of computing power and wasting energy. Now it is adding transactions to the Polygon platform, which enables transactions without huge transaction fees associated with using IT.
Today, the company announced that all Ethereum gas fees (those associated with computational costs for NFT minting on the blockchain) have been waived for creators, buyers, and sellers in the OpenSea Marketplace. These are the kinds of steps OpenSea needs to take to make blockchain less esoteric and more acceptable to the general public.
“We are now the premier cross-blockchain NFT marketplace,” Finzer said. “We have announced support for our Polygon integration, which is a Layer 2 platform for Ethereum. This allows for zero transaction costs for creators, buyers and sellers. And we are rolling out new blockchain integrations in the future.
Over time, the company wants to reduce transaction costs across all platforms (as it did with the addition of Polygon), allow people to use whatever payment method they have, and then educate the market on NFTs. Users can use any crypto wallet with OpenSea.
“We are making the product more accessible to a mainstream consumer by creating a kind of core market integration and really solidifying OpenSea as a brand directly related to NFTs, very similar to how Coinbase has established itself as the brand around cryptocurrency, ”Finzer said. .
In June 2021 alone, OpenSea sold $ 160 million of digital assets on its NFT marketplace and experienced 45 times greater volume growth in the first half of 2021, compared to just $ 8 million in sales in January.
High-growth collectible avatar projects like Hashmasks, Bored Ape Yacht Club and Meebits, which combine elements of art, blockchain technology and social clubs, also took off on OpenSea in 2021.
“What’s exciting about NFTs is that the use case isn’t just purely financial or purely speculative,” Finzer said. “People from all kinds of different industries started to get curious. It is true that many of them are the first to adopt. But it really extends beyond people who are really interested in stock trading or whatever, to people who are more interested in creative work.
NFTs have exploded in applications such as art, sports collectibles, and music. NBA Top Shot (a digital version of collectible basketball cards) is one example. Built by Dapper Labs, NBA Top Shot has surpassed $ 700 million in sales just seven months after its IPO. And an NFT digital collage by artist Beeple sold at Christie’s for $ 69.3 million. The game has a few new unicorns, or startups valued at $ 1 billion, in Animoca Brands and Forte. NFTs are now selling at a rate of $ 62 million per week, although the initial hype around NFTs is fading after a peak in May of $ 175 million per week, according to Nonfungible.com.
“There was a bubble mechanic going on there. But now, as you pointed out, we are kind of seeing an increase in more sustainable growth in terms of the market, ”Finzer said. “OpenSea is doing particularly well in this environment.”
A multifaceted market
OpenSea provides both a marketplace and a platform where users can easily connect their crypto wallets to instantly buy or list their NFTs.
With OpenSea’s new capital injection, the company plans to invest in its next phase of ecosystem growth with cross-blockchain support, enabling an open data economy.
“We think this is an opportunity for those who may have been curious about crypto and blockchain but didn’t really feel like there was a platform with real utility that could go beyond financial speculation, ”Finzer said. “We think NFT and OpenSea are really, extremely well positioned to lead the next wave of blockchain adoption.”
The OpenSea Marketplace currently supports multiple blockchains, such as Polygon and Ethereum, and will announce support for Flow and Tezos in the near future. Investing in the interoperability and scalability of the OpenSea cross-chain marketplace is part of the company’s larger vision to bring users closer to Web3. Users can pay with stable coins such as USDC, but they cannot pay with US dollars yet.
OpenSea was launched in 2017, announcing a $ 2 million Founders Fund round of funding a few months later alongside major crypto companies. In March 2021, the company announced a $ 23 million institutional round led by A16z, with the participation of existing investors and angel investors including Ron Conway, Mark Cuban, Belinda Johnson, Naval Ravikant, Ben Silbermann, and more. . The company recruits engineers and other employees.
Finzer said games such as Axie Infinity, The Sandbox, F1 and Crypto Voxels are taking off with NFT sales.
“We are really excited that NFT represents a paradigm shift in technology where most of the mainstream technology has been dominated by a few large companies,” said Finzer. “We believe that NFTs are bringing back a Renaissance, where creators, collectors, developers and all kinds of projects will emerge, very analogous to the paradigm shift where the birth of the Internet really brought thousands of new applications early and ultimately , billions of people, radically changing their lives.
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