Despite the bear market, institutional investors continue to place bullish bets on NFTs.
Tessera, a collective NFT ownership platform formerly known as Fractional, has raised $20M in a Series A funding round led by Paradigm, a major venture fund with over $10B in assets under management.
Since launching in 2021, more than 70,000 people have used Fractional to collectively own 6,500 prized NFTs, and the protocol has facilitated over $2B in total trading volume. The platform has been used to collectively buy a $3.46M Zombie Cryptopunk, raise $8M for Ukraine, and form decentralized autonomous organizations (DAOs) to buy the original Doge meme as an NFT and another called Free Ross DAO in support of Silk Road founder Ross Ulbricht.
NFT Bear Market
The NFT market continues to languish. NFT trading volume peaked at $17.1B in January 2022 and has since dropped 95% to just $1B in June and $825M in July.
Despite the bear market, institutional investors still seem to be interested in new ways of using NFTs. The Block’s July funding recap shows that NFT and gaming startups have remained popular with investors over the past 12 months. The sector attracted over $2B in July alone.
NFTs Representing Fractional Ownership
Under its current setup, buyers receive ERC20 tokens that represent a share of NFT ownership. After the launch of its upcoming V2 protocol, Tessera will use NFTs to represent ownership stakes in the more valuable NFT that is being fractionalized.
“[The old method] was a really, really big barrier for a lot of our users, who are just so used to trading NFTs on OpenSea or any of these other marketplaces, and that level of education and trying to explain how all this works was just a step too far for a lot of people,” Tessera founder Chorlian told Fortune.
Tessera’s Series A also included Focus Labs, Uniswap Labs Ventures, E Girl Capital, Yunt Capital, and over 50 angel investors.