Billion Dollar NFT Marketplace Magic Eden raises $ 130 million despite signs of crypto winter
Magic Eden is the latest NFT marketplace to make money
Crypto may be down, but Jack Lu and Zhouxun Yin continue to build.
The co-founders of Magic Eden, the top Solana
Magic Eden now becomes the third NFT marketplace to achieve unicorn status along with $ 13 billion OpenSea and $ 7 billion LooksRare. The financing was led by Electric Capital and Greylock, and it comes three months after the company announced its $ 27 million Series A series in March 2022.
“Magic Eden’s ability to keep pace and innovate in a rapidly evolving NFT market is extremely impressive,” said Avichal Garg, co-founder and CEO of Electric Capital. “They are one of the fastest moving and most user-centric companies in Web3.”
In its nine months since its launch, Magic Eden has grown to become the largest Solana-based NFT marketplace, with approximately 97% of daily NFT purchases on the platform, per Dune Analytics.
Unlike traditional NFT platforms, Magic Eden operates as both a primary and secondary trader, which means that NFT creators can launch NFT collections through the platform’s “Launchpad” function, as well as sell parts they have made or bought on the secondary market. It has popular Solana-based collections, including Degenerate Ape Academy and Solana Monkey Business.
This vertical integration stems from Lu and Yin’s vision of NFTs as the first ramp into the Web3 ecosystem. “They are the fun, the social, cultural and the very emotional aspects of a blockchain or Web3 use case,” said CEO and co-founder Jack Lu. “We see ourselves as the bridge to bring the next billion users onto Web3 using NFT technology.”
However, it will not be easy to take this next step.
First, NFT transaction volumes and prices have coincided with the rest of the crypto market. Solana is also a much less popular blockchain compared to Ethereum
Solana’s reputation has also suffered a major blow as the chain reported five major outages in 2022, a major concern for blockchains that will never go down. These reboots contributed to the price of SOL, Solana’s original token, falling by almost 80% so far in 2022. Magic Eden plans to use this round to help move away from Solana’s dependence and explore alternatives and more. chains.
Finally, with this new round of funding, the Magic Eden team plans to expand their NFT game offering. The marketplace already displays 35 blockchain-based games with over 430,000 monthly users, per website. Among the games listed on the site are Aurory and Genopets, two established Solana-based game collections.
For the co-founders, the gaming industry already has the key elements in NFTs – a strong community and an exchange of goods within the gaming ecosystem.
“We realized that this is actually very similar to how people think about NFTs and what people did with them,” said co-founder and COO Zhouxun Yin. “When you combine the two, Web3 native and games, you get real ownership of these elements.”
The team is betting that this desired integration, combined with these new funds, will help Magic Eden cope with what could be a long-lasting crypto winter.
“A downturn, especially when the company is as well capitalized as Magic Eden and has generated significant cash flows, is actually a pretty good position to acquire that talent and just build through it,” said Mike Duboe, a partner at Greylock.
“There’s no better time to build than in a bear market,” Yin adds.
