OpenSea raises at a $1.5 billion valuation despite an NFT pullback

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Few even in the crypto world were surprised when the sales of non-fungible tokens began to fall after a gangbusters few months.

While $265 million-plus worth of such tokens traded hands in the month ending May 20, that figure dropped to $58 million in the month ending June 20, according to data from NonFungible.com. At the start of 2021, interest in NFTs came seemingly out of nowhere, leading even the bullish in the space to warn of irrational exuberance: Beeple, the artist who became a poster child of the space after selling his NFT “Everydays: The First 5000 Days” for $69.3 million, said the nascent industry was in a bubble in March.

Despite this pullback however, major crypto investor Andreessen Horowitz is putting millions behind OpenSea, an auction marketplace for the space that hit warp speed in the pandemic.

On Tuesday, the company raised $100 million at a $1.5 billion valuation with existing investor a16z leading the round. Others in the financing include Coatue, CAA, Michael Ovitz, Kevin Hartz, Kevin Durant, and Ashton Kutcher. The company raised its last round, $23 million, just this March.

While data from NonFungible.com suggests that NFT sales across the board reached a peak in May, OpenSea CEO Devin Finzer says his company was largely able to avoid a trough. In total, the company posted $160 million in gross merchandising value in the first half of July, already matching the entirety of its June figures. It’s a nose-bleed trajectory, especially when considering that figure was $8 million in January.

Before we go deeper into how, it may be helpful here to rehash what exactly an NFT is: While they’ve been heavily associated with art and artists since the start of the year, at its core, such tokens are a kind of authentication—a certification that the underlying good is the real thing and is one-of-a-kind. Meaning it can represent art or say a real estate deed.

Or event tickets, or website domain names. While the boom in art NFTs may have calmed in recent months, Finzer says transaction volume on OpenSea was replaced by other sources such as NFTs that give users access to certain Discord servers or Telegram groups, like the Bored Ape Yacht Club, or tokens associated with games like a horse-racing one called ZED RUN. In short, yes the company is about NFTs, but Finzer believes OpenSea is diversified even within that space.

“There’s a lot of excitement and talk about NFTs. But when you look at the numbers that own and can buy NFTs today,” Finzer says, rehashing a sentiment expressed by his investor—the partners of a16z—on the wider crypto space. It’s clear that there’s a “big funnel from hearing about the tech to actually using it,” he says.

It is worth noting that data from NonFungible.com shows NFT sales overall have come back somewhat, hitting $186 million in the month ending July 20.

OpenSea is currently profitable, says Finzer, given it has low overhead: It takes about a 2.5% cut off transactions, and currently has just 30 people on its team (yes, the company is hiring). But there are now larger economic concerns about rising inflation triggering higher interest rates—which may turn investors away from such alternative assets like NFTs.

“There is a risk of a macro level event from a capital perspective,” says Finzer. Which in part is the rationale for the new fundraising. “We’re really ensuring that the company is well equipped, from a capital perspective, to weather any storms.”

Lucinda Shen
Twitter: @shenlucinda
Email: lucinda.shen@fortune.com

Jessica Mathews compiled the IPO and SPAC section of the newsletter.

VENTURE DEALS

- Swiggy, an India-based leading on-demand delivery platform, raised $1.3 billion. Prosus and SoftBank Vision Fund 2 led the round and was joined by investors including Accel and Wellington.

- Rappi, a Colombian delivery startup, raised about $500 million at a $5.3 billion valuation. T. Rowe Price led the round and was joined by investors including Baillie Gifford, Third Point, Octahedron, GIC SoftBank, DST Global, Y Combinator, Andreessen Horowitz, and Sequoia Capital.

- Tilting Point, a New York City-based free-to-play games publisher, raised $235 million. General Atlantic led the round and was joined by investors including Red Ventures and Kamerra.

- JOKR, a New York City-based grocery delivery company, raised $170 million in Series A funding. GGV Capital, Balderton Capital, and Tiger Global Management led the round and were joined by investors including Activant Capital, Greycroft, FJ Labs, Kaszek, and Monashees.

- SmartRecruiters, a San Francisco-based recruiting software company, raised $110 million in Series E funding. Silver Lake Waterman led the round and was joined by investors including Insight Partners and Mayfield Fund.

- Employment Hero, an Australian HR and payroll software company, raised AUD$140 million ($103 million) in Series E funding. Insight Partners led the round.

- Choco, a Berlin-based maker of software for restaurants and suppliers, raised $100 million in Series B funding. Left Lane Capital led the round valuing it at $600 million. Insight Partners, Coatue Management, and Bessemer Venture Partners also joined.

- Path Robotics, a Columbus, Oh.-based robotics company, raised a $100 million in Series C funding. Tiger Global led the round and was joined by investors including Silicon Valley Bank.

- OM1, a Boston-based health technology company, raised $85 million in funding. D1 Capital Partners, Kaiser Permanente, and Breyer Capital led the round and were joined by investors including General Catalyst, Polaris Partners, Scale Venture Partners, 7wire Ventures, and Glikvest.

- Sundae, a San Francisco-based residential real estate marketplace focused on dated or damaged property, raised $80 million in Series C funding. Fifth Wall and General Global Capital led the round and were joined by investors including QED Investors, Wellington Management, Susa Ventures, Founders Fund, First American Financial, Prudence Holdings, Crossover VC, Intersect Capital, Gaingels, and Oberndorf Ventures.

- HealthifyMe, an Indian health and wellness app maker, raised $75 million in Series C funding. LeapFrog and Khosla Ventures led the round with a $30 million investment each.

- Vestwell, a New York City-based 401(k) recordkeeping tech company, raised $70 million in Series C funding. Wells Fargo Strategic Capital and Fin Venture Capital led the round and were joined by investors including Goldman Sachs and Morgan Stanley.

- Mural, a digital collaboration software startup, raised $50 million in Series C funding valuing it at over $2 billion. Insight Partners and Tiger Global led the round.

- Inkbit, a Boston, Mass.-based 3D printing system, raised $30 million in Series B funding. Phoenix Venture Partners led the round.

- Paro, a Chicago-based accounting and financial services startup, raised $25 million in Series B funding. Madrona Venture Group led the round and was joined by investors including Revolution Ventures, Sierra Ventures, and KGC Capital.

- Dover, a recruiting platform, raised $20 million. Tiger Global led the Series A round and was joined by investors including Founders Fund, Abstract Ventures, and Y Combinator.

- Sweetch, An Israel-based maker of a health-tracking app, raised $20 million in Series A round funding. Entreé Capital led the round and was joined by investors including Noaber, Kortex Ventures, Insurtech VC, Fin TLV Ventures, Philips, OurCrowd, and Qure Ventures.

- Cube Dev, an open-source company for building business tech tools, raised $15.5 million in Series A funding. Decibel led the round and was joined by investors including Bain Capital Ventures, Betaworks, and Eniac Ventures.

- Esusu, a Harlem, N.Y.-based rent-reporting alternative to credit, raised $10 million in Series A funding. Motley Fool Ventures led the round and was joined by investors including Serena Ventures, The Equity Alliance, Predictive VC, Concrete Rose Capital, Impact America Fund, Global Impact Fund, Next Play Ventures, and Zeal Capital Partners.

- Native Voice, a Denver-based voice services company for communicating with brands, raised $14 million in seed funding. Investors included Gutbrain Ventures, PBJ Capital, and Signal Peak Ventures.

- Saranas, a Houston-based bleed-detection company, raised $12.8 million in Series B funding. Baird Capital led the round.

- Rise Gardens, a Chicago-based maker of an indoor gardening setup, raised $9 million in Series A funding. TELUS Ventures led the round and was joined by investors including True Ventures, Amazon Alexa Fund, and Listen Ventures.

- Recapped, a New York City-based maker of sales software, raised $6.3 million in seed funding. Charles River Ventures led the round and were joined by investors including Roundtable Accelerator, CoFound, AirAngels, Prime Set, Twenty5Twenty, Peter Kazanjy, and Alan Chunk.

- Breakr, an Oakland, Calif.-based music promotion marketplace, raised $4.2 million in seed funding. Slow Ventures led the round.

- Faraday, the maker of a consumer prediction platform, raised $4.1 million in Series A funding. Intercap led the round and was joined by investors including FreshTracks Capital and Launch Capital.

PRIVATE EQUITY

- DreamBox Learning, backed by TPG, agreed to acquire Reading Plus, a Winooski, Vt.-based online reading program for grades 3-12. Financial terms weren't disclosed.

- IK Investment Partners agreed to acquire Blanchon, a European manufacturer of woodcare solutions, from Abénex. Abénex will also reinvest in the company. Financial terms weren't disclosed.

- HEPACO, backed by Gryphon Investors, acquired Environmental Management Alternatives, a St Louis, Mo.-based provider of waste services. Financial terms weren't disclosed.

- Madison Industries’ Indoor Air Quality vertical agreed to acquire Big Ass Fans, a Lexington, Ky.-based provider of air flow solutions, from Lindsay Goldberg. Financial terms weren't disclosed.

- Platinum Equity agreed to acquire Unical Aviation, a City of Industry, Calif.-based provider of aircraft parts and components. Financial terms weren't disclosed.

- PLZ Aeroscience, backed by Pritzker Private Capital, acquired 220 Labs, a Riverside, Calif.-based formulator of hair, skin and body products. Financial terms weren't disclosed.

EXIT

- Carlisle Companies (NYSE: CSL) agreed to acquire Henry Company, an El Segundo, Calif.-based company controlling water, vapor, and energy flow in buildings, from American Securities. The deal values the company at about $1.6 billion.

- Bill.com acquired Invoice2Go, an invoice estimating software company, for $625 million in cash and stock.

GIC acquired a minority stake in Biotrop, a Brazilian agtech, from Aqua Capital. Financial terms weren't disclosed.

IPO

- Rent the Runway, a New York City-based clothing rental and e-commerce company, confidentially filed for an IPO, per Reuters.

- MeridianLink, a Costa Mesa, Calif.-based cloud-based product company, now plans to raise up to $312 million in an offering of 12 million shares priced between $24 and $26 per share. The company posted $199.3 million in net revenue in 2020 and net income of $9.2 million. Thoma Bravo and Serent Capital back the firm.

- SOPHiA GENETICS SA, a Switzerland-based biotechnology company, plans to raise up to $247 million in a U.S. offering of 13 million shares priced between $17 and $19 per share. The company posted $28.4 million in revenue in 2020 and reported a loss of $39.3 million. Alychlo and Balderton Capital back the firm.

- CS Disco, an Austin-based legal software company, plans to raise up to $217 million in an offering of 7 million shares priced between $30 and $31 per share. The company posted $68.4 million in revenue in 2020 and reported a $22.9 million net loss. Bessemer Venture Partners and the Stephens Group back the firm.

- HCW Biologics, a Miramar, Fla.-based immunotherapy company, raised $56 million in an offering of 7 million shares priced at $8 per share. DeepWork Capital backs the firm.

- Marpai, a Tampa-based health plan services company, filed for an initial public offering. The company generated $18.4 million in net sales in 2020 and reported a net loss of $12.5 million.

SPAC

- Nexters Global, a European video game developer, will go public by the end of September via a merger with Russian SPAC Kismet Acquisition One Corp., per Reuters. A deal values the company at $1.9 billion.

- PropertyGuru, a Singapore real estate search company, will go public via a merger with Bridgetown 2 Holdings, a SPAC backed by Richard Li and Peter Thiel, per Bloomberg. A deal would value the company at about $1.8 billion.

- Fast Radius, a Chicago-based digital manufacturing company, will go public via merger with ECP Environmental Growth Opportunities Corp., a SPAC. A deal values the company at about $1.4 billion.

- Gelesis, a Boston-based biotech focused on GI-related chronic disease therapies, will go public via a merger with Capstar Special Purpose Acquisition Corp., according to Reuters. A deal values the company at about $1.3 billion.

F+FS

- Pillar VC, a Boston-based seed-stage venture capital firm, closed its third fund with $169 million and its Pillar Select fund with $23 million.

- Moxxie Ventures, a San Francisco and Boulder-based seed-stage investor, raised $85 million for its second fund.

- Sofinnova Partners, a European life sciences venture capital firm, closed its medtech acceleration fund at about $75 million.

- Aperture Venture Capital, a New York City-based seed-stage venture firm that invests in Black, Latin and female founders, raised $75 million fund. FIS and Truist Financial anchor the fund and are joined by PayPal.