David Haynes (left) a founder at SoundCloud has partnered with XR industry veteran, Petri Rajahalme to launch a €25 million fund that’ll specialise in metaverse investments.
FOV Ventures has secured €16.5 million of its €25 million target and aiming to back some 25-30 metaverse start-ups at its seed and pre-seed stage.
“We’ve been looking at this for five or six years — we started talking about the metaverse as spatial computing, and investors didn’t understand what that meant,” Haynes tells Sifted. “All of a sudden in Q3 and Q4 of last year, everyone including CNN was covering it, and Mark Zuckerberg renamed his entire company to Meta, it obviously helped a lot.”
Rajahalme and Haynes went on to say that the limited partners that are backing the fund are a combination of larger institutions, VCs wanting metaverse exposure, individuals who have made their money in the gaming industry and family offices.
The fund will be one to the few in Europe to be specifically focused on metaverse investments. Hiro Capital, a Luxembourg-based company recently just announced a $340 milion for investing in seed and early rounds in category such as creator platforms, eSports and, of course, the metaverse.
Where to invest in the metaverse
While the FOV’s €25 million is a relatively modest fund, Haynes says that a specialist investor can do a lot with smaller sums. FOV also seeks to invest in three different types of metaverse companies: those creating games and experiences in the metaverse such as digital fashion, concerts and shopping.
According to a report by ARtilery Intelligence, an AR research group, So-called “camera commerce” — using AR as a part of the shopping experience — is expected to influence a staggering $36 billion worth of retail purchased by 2024. FOV is already making small investments in virtual fashion as well as NFT goods marketplaces.
Both Haynes and Rajahalme acknowledge that the hype surrounding the metaverse has its pros and cons. On the one hand, it has made it easier for them to raise their fund. But heightened expectations could also mean disappointment. One of the biggest risks, Haynes says, is timing.
“It’s knowing which are the areas that are going to happen immediately versus those that will take longer to play out. We’d invest in a developer tool for people to build AR experiences, but we probably wouldn’t invest in a company that really relied on consumer AR glasses to come to the market.”
However, FOV will not be investing in cryptocurrencies and NFTs despite these are seen by some people as an essential building block of the metaverse, an immersive shared virtual world where people can play games, socialize and work.