One of the most popular platforms for non-fungible tokens (NFTs), OpenSea, revealed in a blog post last week that the company is now valued at $13.3 billion. The company, which was founded in 2017 by entrepreneurs Devin Finzer and Alex Atallah, has had a hugely successful year, with NFTs becoming the latest craze in the art world.
The current valuation follows the company’s recent Series C funding round, which was led by the investment firms Paradigm and Coatue, and resulted in a new investment of $300 million. Following Series B funding round in July of last year in which $100 million was raised, the company was valued at $1.5 billion, which indicates the significant increase in value of OpenSea over the last six months. Fred Ehrsam, a founder of the investment firm Paradigm, said in a statement that Finzer and Atallah “have shown true grit over the last four years, weathering uncertainty and sticking to their vision of NFTs as an internet and world-changing primitive.”
NFTs have been at the centre of the art world over the last year and celebrities have been at the forefront of this digital art. Earlier this month, rapper Eminem purchased a NFT by the Bored Ape Yacht Club (BAYC) which depicts an ape resembling Eminem named ‘EminApe’ for around $460,000, a purchase which took place on the OpenSea platform. 2021 saw some significant sales in digital artworks, with Canadian musician and artist Grimes selling a collection of her work and an artwork by Beeple selling at Christie’s for £50 million.
However, not everyone is as enthusiastic about this new frenzy in the art world. Author David Gerard attributes the high valuation of some crypto-businesses to a lack of investment opportunities for the rich. He states, “there’s far too much money sloshing around and far too few places to put it. Even the rich are buying lottery tickets.” Further, the world of NFTs can be a dangerous place for investors, and there has been criticism over the largely unregulated market. On 30 December, art dealer and gallerist Todd Kramer claimed on Twitter that he had had more than $2.2 million worth of NFTs stolen from him. OpenSea reportedly intervened by preventing further trade on the items.
Finzer wrote in the blog post announcement of the new funding that OpenSea aimed to achieve four goals with the money: “1. accelerate product development, 2) significantly improve customer support and customer safety, 3) meaningfully invest in the wider NFT and Web3 community, and 4) grow our team.” The company plans to double its customer support staff to deal with current platform issues, and they also revealed that Shiva Rajaraman, a former employee of Meta, would be joining the team as vice president of product. Following the success of 2021, it will be interesting to see how the market for NFTs develops in 2022.
