OpenSea Steps Down from Pedestal: CEO Admits Considering Acquisitions and Being Acquired
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OpenSea Steps Down from Pedestal: CEO Admits Considering Acquisitions and Being Acquired
OpenSea CEO said they have received acquisition interest but did not specify when or by whom.
Navigating Web3 tides with focused insightsBy Liam Kelly, DL News
Translated by Felix, PANews
Last year's NFT market collapse has made OpenSea’s once $13.3 billion valuation appear somewhat inflated. Now, the NFT market is swirling with acquisition speculation.
OpenSea CEO and co-founder Devin Finzer said this week the company is open to deals — including being acquired.
"Frankly, we've taken a fairly open-minded approach," Finzer said in an interview. "We believe that if the right partner comes along, then of course we should consider it."
Blur catches up; OpenSea aims to build a 'safe and compliant' brand
Still, Finzer said OpenSea isn't actively seeking buyers and has "no plans for an acquisition."
At its peak, OpenSea commanded 90% of the NFT industry's market share. According to Dune Analytics, OpenSea's monthly trading volume has now dropped to $171 million — a 96% decline from January 2022.
Meanwhile, rival Blur, an NFT platform launched at the end of 2022, has overtaken OpenSea as the largest NFT marketplace through token airdrops.
Although OpenSea still has more users than Blur, the latter's daily trading volume of $18 million is five times higher.
Finzer said he isn't concerned about Blur's performance and is focused on building a brand centered on user safety by delisting any fraudulent or problematic collections.
"We've just noticed that Blur has taken many legal and regulatory shortcuts."
Multiple acquisitions fail to boost OpenSea's declining equity value
As the crypto market transitions from bear to bull, traders typically buy low, which could lead to some consolidation in the NFT space.
OpenSea has already completed several deals. In 2022, it acquired Gem, an NFT aggregation tool, as well as early crypto wallet Dharma and Mintdrop, which enables creators to quickly launch their work to market.
For Finzer, talent is the top priority in acquisitions. "Some of the most passionate people are those who started their own projects — the entrepreneurial types. Maybe their startups didn’t get the traction they wanted, so they’re looking for other opportunities."
Yet OpenSea’s multiple acquisitions seem to have had little effect. According to The Information, Coatue slashed the value of its OpenSea shares by 90% last November, down to $13 million.
Additionally, Tiger Global Management wrote down the value of its OpenSea holdings by 94% in December last year.
Finzer declined to comment on long-standing rumors that OpenSea is keen on pursuing an initial public offering (IPO).
Market recovery and traditional brands entering NFTs
From the outset, NFTs have made sense for many content-based companies, including entertainment giants, professional sports leagues, museums, and fashion houses.
In the first weeks of 2024, Finzer shuttled between meetings with luxury brand executives developing custom NFT projects and attending various fashion weeks in Paris.
This isn’t a new trend — Gucci and Louis Vuitton entered the crypto space back in 2021. But Finzer says this year feels different.
"I think there's now a deeper understanding of crypto externally. When I talk to them, I'm impressed by how mature these projects and their executors are."
Finzer sees more encouraging signs of market recovery. Users are redeeming NFTs for physical goods, brands are moving into the metaverse — a broad term referring to persistent online digital environments — and creating "purely digital experiences."
After a difficult period, this shift is most encouraging. Finzer confirmed that last fall, OpenSea laid off half its workforce.
"The restructuring we did was really about reshaping the team into a leaner, smaller organization that can operate more nimbly in the market, rather than shrinking due to financial pressure."
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