The news of OpenSea’s upcoming IPO is not groundless. OpenSea has hired Brian Roberts, the former CFO of the leading U.S. ride-hailing platform, as the company’s chief financial officer, and Roberts also hinted that it will advance the IPO soon. Say: “When you have a company that grows as fast as OpenSea, it would be foolish if you don’t consider it going public.”
In addition to Roberts clearly mentioned the listing plan. Founder and CEO Devin Finzer said that although the company is not short of money (Roberts just raised 100 million US dollars recently, valued at 1.5 billion US dollars). But more funds raised by OpenSea can be used to acquire companies, establish partnerships and establish joint ventures. Further expand the use of NFT to new industries.The company is currently discussing new financing issues with investors including a16z, Founders Fund, Coinbase and Blockchain Capital. (Supplement: At present, no company has issued its own token after IPO)
However, it should be noted that OpenSea has not yet clearly stated that it will not issue tokens. Some optimists believe that OpenSea may concoct a hybrid model. Combine a traditional IPO with some type of community token. However, with the continuous emergence of IPO news, even the community believes that OpenSea betrayed Web3.0.
What kind of company is OpenSea?
First of all, OpenSea is an NFT trading platform. Profits by charging a 2.5% transaction fee for seller transactions. However, OpenSea is the world’s largest NFT trading platform. Since its launch, its historical sales have exceeded 10 billion U.S. dollars. It is reported that in August, when the transaction peaked, the monthly transaction volume of the OpenSea platform was as high as 3.4 billion U.S. dollars. Currently, in the NFT transactions in November, OpenSea has a market share of 92.5%.
The advent of NFT’s tuyere allowed OpenSea to fly successfully. According to the memories of OpenSea founders Devin Finzer and Alex Atallah. They had a miserable life when they launched an irreplaceable NFT platform-OpenSea, which can be created, bought and sold. Twenty-six months after going online, they only had 4,000 active users with USD 1.1 million in transactions per month, which is equivalent to (based on OpenSea 2.5% sales commission) platform monthly revenue of only USD 28,000.
This situation turned around in February 2021, and the NFT market began to wake up.
A large number of users poured into the platform to trade NFT on the platform. Since then, almost every time a phenomenon-level explosive NFT is released or when KOLs such as Beanie and Gary Vaynerchuk promote a certain NFT series at the same time, the OpenSea website will collapse due to the surge in the number of visitors.
The rapid expansion of OpenSea is like a butterfly flapping its wings in the Amazon rainforest, which will cause a series of reactions. First of all, investors have seen the wealth portal. They look forward to OpenSea issuing their own native tokens and believe that if OpenSea issues tokens, they will definitely issue airdrops to users (in fact, OpenSea has indeed issued and governed tokens). So some people do not hesitate to spend human and financial resources to interact with OpenSea one by one with hundreds of accounts, hoping to make a lot of money when sending airdrops.
Then when the airdrop users helped OpenSea to refresh the data, the capital again saw the wealth value behind it. One after another, they put aside the olive branch of capital on OpenSea (Although Red Shirt Capital did not invest, it has recently expressed that it wants to be all in the blockchain). The final result we saw is that OpenSea has become the world’s largest NFT trading platform, and in 2021 it has also received investment from a number of head funds including a16z and Coinbase (in 2021, it received US$23 million in Series A and US$100 million, respectively. Series B financing. Currently, multiple rounds of financing of US$1 billion in Series C financing are underway.
OpenSea: a rapidly growing company
From 4,000 monthly active users to 200,000 monthly active users. The 50-fold growth of OpenSea in half a year is a miracle, but it has also plunged OpenSea into crisis many times. For example, the server crash problem mentioned in the previous article. According to statistics, OpenSea crashed due to NFT transactions in 2021. Over 11 times, large and small, there were countless times of congestion (even there was a problem that all NFTs could not place orders for a period of time). Trapped in OpenSea is not ready to meet a series of problems brought about by rapid growth.
Another example is the shocking “rat barn” incident not long ago. OpenSea employees take advantage of their positions. Use a few small accounts to buy NFTs in advance, then hype them on the front page headlines to make their value soar, and finally transfer them to the main account to complete the transaction. The rat warehouse incident caused strong resistance from users after Twitter was shaken out. OpenSea had to take emergency measures. When the company advertises for collectors or artists. When the company advertises for collectors or artists. OpenSea employees are prohibited from buying their NFTs, and OpenSea employees are prohibited from buying and selling NFTs through internal information. To calm public anger.
At the same time, the foundation of OpenSea is unstable
Although OpenSea certainly has an overwhelming advantage over Rarible, the second largest in the industry (other platforms add up to not as much transaction volume as OpenSea). But powerful enemies are coming. Recently, including Coinbase, FTX.us and other exchanges have announced plans to launch the NFT market, and as Sequoia Capital and other institutions join the battle to cheer, the threat of latecomers will become greater and greater in the future. And if OpenSea really can’t apply for airdrops, presumably this part of the profit-driven core users don’t mind changing places to apply for airdrops, and their departure will also counteract its valuation.
Harvard Business School associate professor Scott Duke Kominers also said. “Early leaders in the encryption field face great risks. The first participants in an industry are not necessarily the most successful. Your network must be strong enough. In order to overcome the successful part of your business model and target slightly different Competitor to your audience.”
Finally, let’s go back to the beginning of the question, what kind of company is OpenSea. I think my answer is: OpenSea is a more influential NFT trading platform, nothing more.