•According to Nasdaq research, investors were more inclined to invest in later-stage companies such as Animoca Brands, compared to early-stage startups, in the Web3 space.
• 216 metaverse funding deals were completed in the last year, totalling nearly US$2 billion.
• The most funded company was Animoca Brands, with 15 closed deals and over $564 million received in 2022.
• Larger metaverse platforms garnered more attention from investors this year; however, this sets the stage for smaller projects in the future.
• Support services AI and avatar firms will continue to see major investment and expansion of open metaverse platforms will define the next phase of development.
The metaverse is a rapidly growing market that is poised to be the next frontier of the digital economy. With the rise of blockchain technology, virtual reality, and augmented reality, investors are flocking to invest in what is being dubbed “the future of the internet.” In 2021, many deals have been made in this space, including Animoca Brands’ $84 million investment from SoftBank Group. Let’s take a closer look at how these investments are changing the landscape and how they will shape future investments.
Metaverse Funding Deals in 2021
Investors have become more willing to invest in later-stage companies such as Animoca Brands, rather than early-stage startups, when it comes to the Web3 space. This trend can be attributed to Nasdaq’s research which indicated that companies like Animoca Brands had a much higher rate of success due to their ability to leverage existing infrastructure and existing customer bases. It is likely that as the popularity of Web3 grows, this trend will continue as investors seek out companies with higher rates of success and proven track records. As other early-stage startups continue to join the Web3 space and grow more established, this trend may change but for now, investors are focusing on investing in later-stage companies.
Investment deals in Web3 technologies rose significantly this year, with total funding reaching $2.2 billion. According to CB Insights data, there were over 230 venture capital investments made in companies operating within the metaverse space since January 2021. The majority of these deals were concentrated on later-stage companies which raised an average of $26 million per deal.
Support services AI and avatar firms also saw major investment this year with more than 50 deals across both areas combined for a total of almost $1 billion dollars invested into those sectors alone. These figures demonstrate that investors are recognizing the potential that these technologies hold for facilitating user engagement within virtual environments and helping create more immersive experiences for users worldwide.
How This Sets The Stage For Future Investment In Metaverse Platforms
As we move forward into 2022, there are several factors driving interest in metaverse investments including increasing consumer demand for interactive digital experiences, advancements in technology such as 5G networks, and rising interest from traditional gaming industry investors looking to diversify their portfolios into new spaces. Additionally, there are opportunities for smaller projects to find success as well thanks to rapid development tools such as Unity 3D and Unreal Engine 4 which allow developers to quickly build out their own worlds without major upfront costs or resources required. As open metaverse platforms continue to expand and evolve, it will no doubt set the stage for further investment opportunities down the line.
The metaverse is an ever-evolving space ripe with potential for innovative companies looking to capitalize on its growth potential through investments from venture capitalists and traditional gaming industry players alike. With more deals being made every day and an increasing focus on monetization strategies from established players within this space, it is clear that now is an ideal time for entrepreneurs looking to make their mark on this exciting new frontier of digital technology and entertainment experiences worldwide. More research should be done on current trends such as support services AI and avatars firms receiving higher attention from investors so entrepreneurs can better understand where they should focus their efforts when entering this market moving forward.
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