1/5/2021- 7:27 a.m.
OpenSea, one of the most talked-about blockchain startups in Silicon Valley, said Tuesday it had raised $300 million in new venture capital, making it the latest company to cash out in a rush to fund cryptocurrency startups.
The new financing round, led by investment firms Paradigm and Coatue Management, brings the startup’s valuation to a staggering $13.3 billion just four years after its founding. OpenSea has previously raised more than $100 million from a variety of investors, including investment firm Andreessen Horowitz and actor Ashton Kutcher, according to data provided by the company.
OpenSea, founded in 2017, was founded as a marketplace for people to buy and sell so-called NFTs or non-exchangeable tokens, which are unique pieces of digital code backed by blockchain technology.
NFT items can vary, but the most popular tokens are digital art created by artists who list their pieces for auction on the OpenSea site, similar to eBay listings. Winning bids can sometimes amount to hundreds of thousands of dollars worth of Ethereum, a popular cryptocurrency and blockchain technology connected to most types of NFTs.
As crypto-focused start-ups have become more popular in recent months, OpenSea has become the central place for enthusiasts to trade NFTs. That has caught the attention of investors looking to place ever-larger bets on the crowded cryptocurrency space.
According to data collected by PitchBook, a private investment tracking company, more than $3 billion in private investment went to NFT firms in 2021. Overall, investors poured more than $28 billion into cryptocurrency and NFT startups around the world last year, PitchBook said.
“In 2021, the world woke up to the potential of NFTs to unlock utility and economic empowerment across a wide range of industries, communities and creative categories,” said Devin Finzer, one of the founders and CEO of OpenSea. “Our vision is to be the destination for these new open digital economies to thrive.”
Still, many cryptocurrency critics think the frenzy surrounding NFTs and blockchain technology is all the rage, plagued by questionable activity. Last week there was a brief controversy surrounding OpenSea after one of its customers claimed that: $2.2 million worth of NFTs had been stolen from him. (OpenSea later froze the stolen assets and banned the items from trading on its site.)
Those concerns have not stopped technologists. Startups targeting cryptocurrencies and NFTs are recruiting masses of employees from major tech companies like Meta, Google and Amazon, luring them with promises to work on new — and potentially lucrative — technologies. Last year, Brian Roberts, the former chief financial officer at Lyft, left the ride-hailing company to join OpenSea as its first chief financial officer.
The company also recently hired Shiva Rajaraman, a former vice president of commerce for Meta, as vice president of product.
The company said it plans to use the new funding to expand its more than 90 employees, while doubling the size of its trust and security team.
The company also plans to invest heavily in product development to make its blockchain technology more accessible to mainstream consumers, and will soon launch a grant program to support makers and blockchain builders in the NFT space.
