It’s been a wild 2021 for NFT auction marketplace OpenSea. The startup was exceedingly well positioned in a niche space when NFTs exploded earlier this year, seemingly out of nowhere. Since then, the startup has found its user base expanding, the total volume of sales skyrocketing and more investor dollars being thrown at them.
The startup announced in March it had closed a $23 million Series A, and now some four months later, the company tells TC it has raised another $100 million in a Series B round led by Andreessen Horowitz at a $1.5 billion valuation. Other investors in the round include Coatue, CAA, Michael Ovitz, Kevin Hartz, Kevin Durant and Ashton Kutcher.
Despite a fall from stratospheric heights in the early summer, the broader NFT market has still been chugging along, and OpenSea is continuing to see plenty of action. The startup saw $160 million in sales last month and is on track to blow past that figure this month, CEO Devin Finzer tells TC.
One of the company’s clearer growth roadblocks has been infrastructure issues native to the Ethereum blockchain that its marketplace has been built around. The Ethereum blockchain, which has a number of network upgrades outstanding, has struggled to keep up with the NFT boom at times, leaving users footing the bill with occasionally pricey “gas” fees needed to mint an item or make a transaction. Though these fees have largely cooled down in recent weeks, OpenSea is aiming to make a move toward long-term scalability by announcing that they plan to bring support for several more blockchains to its platform.
They’re starting with Polygon, a popular Layer 2 Ethereum blockchain that boasts a more energy-efficient structure that will allow OpenSea to entirely eliminate gas fees for creators, buyers and sellers on that blockchain. Losing these fees may give OpenSea a better shot at expanding its ambitions, which include finding a future for NFTs in the gaming world and in the events space, Finzer says.
Beyond Polygon, OpenSea has plans to integrate with Dapper Labs’ Flow blockchain, as well as Tezos down the road, the company says.
Operating across multiple blockchains could create some headaches for consumers operating across platforms with differing levels of support for each network. Some NFT investors are also more hesitant to buy items on blockchains they see as less time-tested than Ethereum, worrying that newer chains may lose support over time. But overall, the user-friendly changes will likely be well received by the wider NFT community, which has seen the explosion in new interest stress-test its systems and highlight need for user interface and user experience improvements.
