MAGIC EDEN MARKETPLACE VALUATION RISES TENFOLD
Despite a halt in private financing and a cratering cryptocurrency market, Magic Eden, a marketplace for NFTs on the Solana blockchain, saw its worth soar in a new funding round.
According to Avichal Garg, investors have pumped another $130 million into the business, valuing it at $1.6 billion — a roughly tenfold rise since March. Even by boom-time standards, that’s a huge jump, but Garg said he invested because he thought the company would be worth much more.
The funding comes when other crypto firms have been hit hard by the market’s downturn. This has dampened interest in NFTs: according to CryptoSlam, monthly global sales fell by around 34% between January and May. And Solana has lost approximately 80% of its value this year.
Garg stated that he was willing to investigate the route.
“I’m not too worried about overpaying because the headwinds will last 18, maybe 24 months, not six years,”. Garg, whose firm co-led the round with Greylock Partners, said in an interview. “You have to be patient with crypto.”
Magic Eden runs an NFT marketplace similar to its competitors, OpenSea and AtomicMarket, earning money by cutting each transaction. Magic Eden has grown swiftly, attracting users attracted by Solana’s efficiency and decreased transaction cost compared to Ethereum.
According to DappRadar, Magic Eden was the ninth-largest NFT marketplace in mid-March. As of Friday, it was in second place, barely behind OpenSea regarding users and transaction volume.
In an interview, Chief Executive Officer and co-founder Jack Lu remarked, “We weren’t planning to start another round right away, but we got a lot of interest.” “A lot of investors still believe we’re in the early stages.”
Lu, who co-founded the company with Zhuoxun Yin, said it generated $7.5 million in revenue in May and has been profitable since its inception. Magic Eden has a $100 million yearly revenue run rate, according to Garg.
According to Lu, the new assets will boost the company’s headcount to 140 from its current 50 and grow in a “responsible” manner over the next six to twelve months. In addition, it plans to extend and combine its collection of Magic Eden-minted NFTs with its broader marketplace at that period, expand into gaming and build on other blockchain technology besides Solana.
Users may benefit from increased stability as a result of this. Unfortunately, the popularity of the Solana blockchain has made it unstable, resulting in a series of blackouts over the last year.
Using various blockchains, however, will make it more akin to OpenSea, a five-year-old project incorporating Solana, Ethereum, Klaytn, and Polygon. In a funding round earlier this year, investors valued OpenSea at more than $13 billion.
