Magic Eden, an NFT marketplace that currently commands the vast majority of the Solana market, is gearing up for expansion. Today, the startup announced that it has raised $130 million in Series B funding with plans to expand beyond the Solana ecosystem.
The Series B values Magic Eden—which was founded last September—at $1.6 billion. That makes it the latest crypto “unicorn” with a valuation of $1 billion or more. Electric Capital and Greylock co-led the round, with new investor Lightspeed Venture Partners also participating alongside previous investors Paradigm and Sequoia Capital.
Magic Eden is only three months removed from its last fundraise announcement: a $27 million Series A round revealed in March. Jack Lu, CEO and co-founder of Magic Eden, told Decrypt that the startup didn’t plan to raise money again so quickly, but said that its rising market share and increasing NFT gaming presence convinced him to build up a war chest.
“We didn't want to feel resource-constrained,” he explained, “and we wanted to build for the next five to 10 years.”
Building out to other blockchains
Beyond pushing even harder on its gaming vertical—which has a key rival in Fractal, a Solana NFT gaming platform from Twitch co-founder Justin Kan—Magic Eden also plans to add support for NFTs on other blockchain platforms.
“It's really clear that we are in—and we'll be in—a multi-chain world for a while,” explained COO and co-founder Zhouxun Yin. He suggested that some types of NFTs, such as games, artwork, and music, are coalescing around certain blockchain platforms and that Magic Eden hopes to serve them, but would not specify any blockchains that the marketplace plans to adopt.
An NFT works like a proof of ownership, and they’re often applied to digital goods like artwork, profile pictures, collectibles, and video game items. Solana is currently the second most popular platform for NFTs behind Ethereum in terms of trading volume.
The Solana ecosystem has shown notable signs of momentum in recent weeks, such as multiple instances of a Solana NFT project topping all Ethereum projects in daily trading volume, and even a single day in which all combined Solana NFT trading volume topped that of Ethereum.
Lu pointed to diversifying use cases for NFTs on Solana, plus a rising influx of Ethereum NFT traders starting to dabble in the Solana space. He also suggested that Solana’s NFT trading “meta” changes often, with new trends appearing every couple of weeks and keeping NFT collectors engaged and buying.
Magic Eden claims a roughly 90% or greater share of the Solana NFT secondary market. Despite the hype, leading overall NFT marketplace OpenSea’s addition of Solana support in April doesn’t appear to have had much of an impact. If anything, Magic Eden’s co-founders think it was positive for the platform.
Yin said that they’ve seen Solana and Ethereum profile picture collections “converging as a market,” which he said they’ve long expected. He added that having OpenSea and Rarible both add Solana NFTs at the same time helped validate the space in the wider NFT community.
While the wider NFT market is down in recent weeks due to the crypto market crash, and Solana (SOL) has lost about 60% of its USD value since the start of May, Lu said that Magic Eden has seen higher SOL transaction volumes in recent weeks.
With Magic Eden eyeing expansion to other blockchain platforms, the co-founders believe that the marketplace has a real shot at dethroning the “more centralized/corporate” OpenSea, as Yin described it, as opposed to its more community-centric, DAO-aided approach.