Magic Eden, a Solana-based non-fungible token (NFT) platform, has surged in value following a new round of funding.
Solana’s Magic Eden has raised an additional $130 million in a Series B funding round, bringing its valuation to $1.6 billion. This move is taking place despite a decline in the overall cryptocurrency market and NFT transactions, suggesting that investors still see potential in this technology.
According to Avichal Garg, managing partner at Electric Capital, a firm that invested in both rounds, the company’s valuation has increased tenfold since March, according to a Bloomberg report. Other participants include Lightspeed Venture Partners, Paradigm and Sequoia Capital.
Like many industry executives who have gone through bear market cycles, Garg isn’t worried. “I’m not too worried about overpaying because the headwinds will last 18, maybe 24 months, not six years,” he said in an interview.
Jack Lu, CEO and co-founder of Magic Eden, said:
“We had no immediate plans to launch another round, but we received a lot of interest. A lot of investors still think we are very, very ahead.”
Marketplace growth momentum
Magic Eden is OpenSea’s own Solana-based version. This platform was founded in September 2021 to offer a point of buying and selling NFTs for a 2% fee. The marketplace has grown rapidly since its launch and according to DappRadarit is now the third largest NFT platform, behind OpenSea and LooksRare.
Many NFT collectors and creators have opted for Solana because of its faster transaction times and lower costs than Ethereum, which is the industry standard. However, the network has experienced many outages and reliability issues over the past year.
According to Cryptoslam, Solana ranks second to Ethereum in 24-hour NFT activity, with $4.7 million in daily sales, compared to Ethereum’s $15.3 million.
DappRadar reports a daily volume of $4.32 million for Magic Eden, although this remains far behind industry leader OpenSea, which boasts $19.89 million. However, Magic Eden accounts for over 90% of all NFT transactions on Solana.
Thanks to its new investment capital, the company will be able to hire en masse, increasing its workforce from 50 to 140 people. It also plans to expand and consolidate its collection of NFT Magic Eden with its most important platform, Launchpad, which has more than 250 projects.
Magic Eden COO Zhuoxun Yin said investors remain willing to bet on this market.
The volume of NFTs in decline
As indicated by Be[In]CryptoNFT platform volumes crashed 75% between January and May.
Their trading volumes are now at 2022 lows and could fall further if the crypto winter drags on, as it did in 2018 and 2019.
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Solana: its Magic Eden marketplace receives new funding despite the market crisis – BeinCrypto
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