Metaverse is not funded.
This conclusion was not surprising from our latest review of knowledge on investment in startups innovating in the metaverse, virtual reality and augmented reality.
An area that was much louder a few years ago has clearly lost its appeal because of VC. The declining investment comes after disappointing adoption of Metaverse hardware and leading platforms.
Even Applelaunching in the US market earlier this yr Vision Pro the headset, advertised as a “spatial computing” device, didn’t cause a noticeable change in sentiment. Demand for a $3,500 device is apparently it coolsand Apple said it lowered its shipment forecast.
In the land of start-ups, the investment climate seems downright cold. According to Crunchbase data, 1 this yr, roughly $464 million has been committed to seed-stage financing rounds for firms related to AR, VR and the metaworld. Thanks to this, in 2024 the total amount of financing might be the lowest in years.
Most of the startups that raised the most funding during the 2021 funding peak have not closed latest rounds since then. This includes the headset manufacturer Magic jump and creator of games using augmented reality Niantic.
This yr, although activity is limited, some significant funding is still being implemented.
2024 marks the largest AR-related round thus far Rocks, a maker of augmented reality glasses, which raised $70 million in January financing. Rokid, based in Redwood City, California, markets its products primarily for workplace and industrial applications, but also has consumer offerings.
Another significant financing went to a company based in Beijing Xreal, a mixed-reality glasses maker that raised $60 million at a $1 billion round in January. The company advertises itself as cheaper competition MetaQuest and Apple Vision Pro.
Fading buzzwords
In addition to lackluster interest in virtual and mixed reality hardware and platforms, one other factor contributing to the seemingly slower funding performance could also be that the buzzwords themselves have fallen out of favor.
A few years ago, describing yourself as a metaverse company may have helped increase interest from enterprise capitalists. Today this is now not the case. Startups, for example, prefer to emphasise their focus on artificial intelligence. Even Apple consciously avoided using the term metaverse in promoting the Vision Pro, opting as a substitute to speak about the device’s spatial processing capabilities.
If the adoption of virtual and mixed reality devices accelerates, enterprise investors will likely bring latest attention and control to this space. But perhaps by then, ambitious startups will start using other buzzwords, equivalent to AI-enabled video simulations or spatial computing environments.