NFT marketplace Magic Eden raises $130 million
Magic Eden, a Solana-focused NFT marketplace, has clocked $130 million in funds for its series B raise. Co-led by venture firms Electric Capital and Greylock as well as Lightspeed Ventures, the startup now carries a $1.6 billion post-money valuation.
With fresh capital in hand, the company plans to use the funds to improve its marketplace for creators and traders as well as integrating it with other blockchain ecosystems beyond Solana.
“NFTs are a much more emotional and relatable use case for blockchain technology. They’re fun, social, cultural, in short, an amazing way to build community on the internet,” Jack Lu, Magic Eden CEO and cofounder, told Yahoo Finance. “We see Magic Eden as the company and platform that’s going to use NFTs to bring the next billion users to Web3.”
The relatively healthy raise comes as NFT floor prices - the cheapest price to buy any non-fungible token from a collection - have collapsed along with the broader crypto market, indicating enthusiasm still remains for well-performing firms.
Launched in September 2021, Magic Eden has quickly become an up-and-coming contender to Open Sea, the largest NFT marketplace by transaction volume and users. As the value of crypto tokens have fallen since March — taking NFT prices with it — Magic Eden’s trading volume not only remained robust, its transaction count through April and May actually accelerated.
In the last month alone, the platform accounted for 92% of all NFTs traded on the Solana blockchain, according to Magic Eden’s internal data dashboards, surpassing Open Sea’s transaction frequency and providing a strong case for a more loyal and engaged user base compared with other platforms.
One reason for its recent success could be the added product dimensions Magic Eden gives internet browsers who visit its NFT marketplace. For example, the company, which has launched more than 50 NFT-related games, lets users play games on its website without having to first purchase an NFT from the game’s collection.
“We want to build immersive experiences where users can come to Magic Eden and enjoy NFTs without necessarily having to buy something,” Lu said.
How’s the NFT market?
Amidst the sel-off in risky assets such as stocks and especially cryptocurrencies over the past two months, the value of NFTs overall has fallen substantially since the market’s peak in late January through February.
According to data from blockchain analytics firm, Nansen, $1,000 put into an index of the top 500 NFT projects at the beginning of 2022 would now be worth $270, a loss of 73%.
Similarly, Yahoo’s index of securitized NFTs (^NFT.REGA) has fallen from $85 to $54, down more than 29% for the past three months.
However, the majority of value in NFT markets over the past year comes from profile picture projects and fine art collections, while the gaming segment — which has seen even worse losses, falling 90% year to date, according to Nansen — remains far more affordable.
David Hollerith covers cryptocurrency for Yahoo Finance. Follow him @dshollers.
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