Solana NFT Marketplace “Magic Eden” Plans To Raise $27 Million From Sequoia Capital

NFT marketplace Magic Eden is planning to announce a $27 million fundraising round on Monday, involving Sequoia Capital and other investors. Magic Eden uses the Solana blockchain to authenticate NFTs on its marketplace. Solana, also referred to as “Ethereum killer,” is capable of facilitating more transactions per second than Ethereum and at a much cheaper cost, according to research by Etherscan.

Sequoia Capital sees a weakness in Opensea’s NFT dominance, as it relies on the less efficient Ethereum blockchain. Hence, the company chooses to invest in the smaller player built around what it sees as a better blockchain for NFTs.

Sequoia Capital To Invest In Solana-Based NFT Market Magic Eden

People consider buying or selling NFTs most frequently from larger marketplaces like OpenSea, which has 43% of the market share, with $23.3 billion in total sales, according to an analysis of data from the research firm DappRadar.

However, Shaun Maguire, a partner at Sequoia Capital, says OpenSea is less efficient due to its reliance on the Ethereum blockchain. On the other hand, Magic Eden, a Solana blockchain-based NFT marketplace, could beat OpenSea by being the first to introduce Solana NFTs.

“The bet was that they would move fast and that they would capture that advantage before OpenSea would be able to go into Solana,” he said.

The investors in the fundraising, other than Sequoia Capital, could include crypto venture capital firm Paradigm, Greylock, Solana Ventures.

Zhuoxun Yin, a former Coinbase product manager, co-founded Magic Eden last year during the NFT boom. Over the past month, trading volumes on OpenSea have reduced in half. Still, NFT sales reached $2.9 billion in February, according to NFT data provider CryptoSlam, and investors expect interest to hold up in the long term.

Magic Eden Continues Growth

Investor Marc Andreessen and Reddit Inc. co-founder Alexis Ohanian backed a $30 million fund last week solely devoted to buying NFT artwork.

wow…we just crossed $1B USD in total secondary trade volume. speechless. thank you. pic.twitter.com/g7hGorg9wd

— Magic Eden 🪄 Solana's Leading NFT Marketplace (@MagicEden) March 12, 2022

Tim Beiko, a core contributor to Ethereum, said that blockchain has a strong community of creators and fans experimenting with NFTs, with the most innovative NFT projects choosing Ethereum.

The Bloomberg report said, Magic Eden has 55 employees dispersed around the world and will open its first office next month in San Francisco. It also created a decentralized autonomous organization called MagicDAO that anyone can join. Members can vote on things like which NFT collections are featured on the homepage.