Metaverse startups start losing investors’ mind space
- ByStartupStory | May 31, 2022
Delhi-based cofounder who left his Metaverse-themed firm last month following differences with another co-founder and the main investor says Metaverse firms trying to cash in on the web3 craze since last October have started losing investors’ minds.
According to founders, venture capital firms, and analysts, the industry is starting to see metaverse startups as riskier investments, and therefore, not looking to invest in them, given the current funding squeeze due to global inflation and impending recession.
Another founder, who runs a funded startup focusing on nonfungible tokens (NFTs), and plans to build a virtual platform around it, said investors were reluctant to agree to the idea of a Metaverse product. Even if they are willing to look into crypto and NFT ventures. “It`s more difficult to sell that idea to them,” he said.
Social media giant Facebook`s rebrand to Meta last October gave a lot of augmented reality (AR) and virtual reality (VR) startups a second chance, but most of them ended long before that, industry insiders said. they were finished.
Sehgal also said that the demand for such investments is likely to decline commensurate with the decline in overall risk appetite.
Another person, who has invested in some of the biggest startups in the country, said that to get distribution, these startups first need a platform, which doesn`t exist yet.
Further, the investor said that the total addressable market for such startups is currently only in lakhs and is insufficient to make any investment. Research firm International Data Corporation (IDC) said in a March report that AR / VR headsets sold worldwide in 2021 were only 11.2 million units, an increase of 92% over the previous year.
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