Solana-based non-fungible token (NFT) marketplace Magic Eden has seen its valuation rise after a new round of funding.
Another $130 million has been raised in Series B investments by Magic Eden, raising its valuation to $1.6 billion. The move comes despite a broader crypto market and NFT trading slowdown, indicating that investors still see potential in the technology.
According to Avichal Garg, managing partner of Electric Capital, which invested in both the rounds, the valuation of the firm has increased tenfold since March. bloomberg informed of. Other participants included Lightspeed Venture Partners, Paradigm and Sequoia Capital.
Like many industry executives who have gone through bear market cycles, Garg remains unfazed. “I’m not too worried about overpaying because the headwinds will last for 18 years, maybe 24 months, not six years,” he said in an interview.
Jack Lu, CEO and co-founder of Magic Eden, commented:
“We weren’t intending to launch another round right away, but we had a lot of interest. A lot of investors still feel we’re too early.”
Solana NFT market momentum
Magic Eden is a Solana version of OpenC, established in September 2021 to buy and sell NFTs while charging a 2% fee. It has grown rapidly since its launch and is now the third largest NFT marketplace according to Dappradar after OpenC and LuxRay.
Many NFT collectors and creators have chosen Solana because of its faster transaction times and lower costs than Ethereum, the industry standard. However, the network has had more than its fair share of outages and reliability issues over the past year.
Solana is second only to Ethereum in terms of 24-hour NFT activity with $4.7 million in daily sales compared to Ethereum’s $15.3 million according to CryptoSlam.
DappRadar reports daily volume of $4.32 million for Magic Eden, though it lags far behind industry leader OpenSea with $19.89 million. However, Magic Eden accounts for over 90% of all NFT transactions on Solana.
The firm will go on a hiring spree with its newly invested capital, increasing the headcount from 50 to 140. It also plans to expand and consolidate its collection of Magic Eden NFTs with its larger marketplace Launchpad, which has over 250 projects.
The COO of Magic Eden, Zuoxun Yin, commented that there is still an appetite for investors to bet on this market.
NFT volume is falling
as reported by BeInCryptoNFT Marketplace volume declined by 75% from January to May.
Trading volumes are now at 2022 lows and could further decline if cryptocurrency winter turns out to be a prolonged affair like in 2018 and 2019.