Fractional raises $20M to facilitate shared NFT ownership, rebranded as Tessera
Fractional, a company that allows people to sell parts of their NFTs, said on Wednesday it was changing its name to Tessera. The move coincides with a new funding round led by crypto giant Paradigm.
Tessera founder and CEO Andy Chorlian said the $20 million investment will be used to add employees to the company’s 24-person team, including some in marketing and external roles as well as developers and engineers.
The Tessera team will also use the additional resources to double down on a new protocol they are developing that will transform the digital parts of a person’s NFTs into NFTs themselves, rather than ERC-20 digital tokens like USDT or USDC.
The fractional NFTs will be akin to a print of an original artwork, Chorlian said, and will simplify the process of trading the fractional shares for those users who may have experience with NFTs but not digital tokens.
“It was a very, very big barrier for a lot of our users, who are just so used to trading NFTs on OpenSea or some of these other marketplaces, and that level of education and trying to explain how it all works was just a step too far for many people,” Chorlian told Fortune.
For many, fractionation of an NFT is seen as an investment move. Tessera’s website says some of the benefits of doing so is getting liquidity for an NFT without having to sell it directly and collect fees from people who buy parts of the NFT.
With the new funding, Chorlian said Tessera is making its name more distinctive and rebranding to reflect a changing ambition for the company, namely to focus less on financialization and more on collective ownership and community. The new name, Tessera, is usually defined as a tile or other material used to construct a mosaic.
“What’s really most exciting to us, generally about this, is how we make interesting connections with other people,” Chorlian said. “How do we empower artists and creators?”
Chorlian launched Tessera in 2021 with co-founder Nejc Krajnik, after graduating with a computer science degree from Villanova University in 2016 and developing smart contracts at organizations such as MakerDAO, the decentralized autonomous organization that issues the DAI stablecoin and specializes in autonomous crypto loans. Since its launch, the company has facilitated $2 billion in total trading volume and hosts around 70,000 unique holders of fractional NFTs, Chorlian said.
Tessera had previously raised $7.9 million in a round led by Paradigm last August, which it said it would use to add to its business development team and internal advisers.
Chorlian said besides Paradigm, the round includes 50 angel investors, all with broad knowledge in NFTs and decentralized finance to provide feedback and guide the company. Investors such as Focus Labs, Uniswap Labs Ventures, E Girl Capital and Yunt Capital also participated in the round.
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