Metaverse companies raised hundreds of millions of dollars in deals in October, proving that the future of the internet is still an extremely hot topic.
Even outside of Mark Zuckerberg’s dreams of Horizon World, businesses all around the globe are investing in technologies and companies to keep them ahead of the metaverse curve. That metaverse is, as it stands, anything they want it to be as the term will mean different things depending on who you ask.
Some may believe it’s based on cloud computing and artificial intelligence, while some believe it’s all about virtual reality (VR) and augmented reality (AR). The thing is that it can and probably involved each of those categories – the metaverse is a convergence of several technology themes, and companies are utilising, adopting, and innovating specific ones to best meet their objectives in Web3.
“Although the metaverse is in the early stages of development, it has the potential to be the next mega-theme in digital media,” says research firm GlobalData, “the metaverse could transform how people work, shop, interact, and consume content.”
However, given the weight the Zuck has put into the role VR and AR will play in his version of the metaverse, we have decided to take a deep dive into the deals raised in those market segments over the years.
Metaverse deals in the VR and AR sectors have dropped in 2022
The number of VR and AR deals carried out each year has increased steadily over the past decade. Back in 2012, the industry secured $223m across 11 deals. Those figures skyrocketed over the next few years. The growth of the metaverse deals in the AR and VR space reached their peak in 2021.
How well do you really know your competitors?
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
That year the industry secured north of $18.9bn across 311 venture financing, private equity, equity offering and equity offering deals. Part of the run to inject cash into those industries could be attributed to it being the same year as Facebook rebranded to Meta to highlight its new focus on becoming a metaverse company. Those capital raises could also be attributed to the overall bullishness of the tech industry last year, with it enjoying a huge bull run.
However, that bull run has now turned into a bear market. Publicly traded tech companies have seen their shares spin into freefall due to a combination of factors contributing to market volatility, such as surging interest rates, pandemic fallouts and Russia’s illegal war in Ukraine.
The VR and AR industry has not remained unscathed from the market turmoil. The number of capital raises in the sector has plummeted this year. Just over $5bn have been raised by VR and AR projects this year across 283 deals.
But, like we said at the top, metaverse deals include more than just VR and AR. The nascent sector also covers cloud, big data and gaming space. This is evident when you look across the 10 biggest metaverse deals raised in October.
Bitgoldex secures $715m in Series A financing to support Web3 development
Bitgoldex led the way among the metaverse deals raised in October. The London-based project management and market operations company secured $715m in a new funding round last month.
The funding was received from nonprofit organisation BAIF Development Research Foundation, based in India, which focuses on a range of initiatives including communications technology. Bitgoldex said they'll use the new funding to support its Web3 innovation, as well as increase its business scope with a scale of 100 billion in the future.
The round also proved part of a return to form for UK startups. The total VC funding raised by the UK startups had fallen below $1bn for the first time this year in August and remained below that mark in September. However, the cash injections rebounded in October to reach just shy of $2bn despite a decline in deal volume.
“The majority of growth in capital raising in October was mainly driven by a single high-value VC deal – $715m raised by Bitgoldex," Aurojyoti Bose, lead analyst at GlobalData, said at the time.
"As a result, the average deal size jumped three-fold from $6m in September to $20.7m in October, underlining the significant impact this one deal had during the month.”
Data centre solution CoreSite secures additional $570m from private equity firm Stonepeak
CoreSite, a hybrid IT solutions company catering to cloud providers, received $570m in funding from private equity firm Stonepeak in October, Private Equity Wire reported.
The investment comes after Stonepeak’s initial $25bn investment back in August, which together represents 36% ownership interest.
CoreSite, a subsidiary of American Tower Corp, provides data centre and interconnection solutions to customers in major communication markets. This includes mobile operators, cloud providers, and more.
IT security company NetSPI receives $410m from global investment company KKR
The metaverse is usually seen as a form of virtual escapism, but whether you want to use it for video games or business meetings, you need strong cybersecurity to do that safely. Thus, it's hardly surprising that a cybersecurity startup were among the biggest metaverse deals raised in October.
NetSPI received $410m in new funding from investment company KKR in October. The company would use the money to secure more talent and further strengthen its techs tack.
"We are excited to double down on our investment in NetSPI to help build a differentiated leader in offensive cyber security," said Jake Heller, partner and head of KKR's Technology Growth team in the Americas.
Automation Anywhere secures $200m in venture funding
The metaverse doesn't have defined borders. Proponents of the next stage of the internet believe that is only natural, as it will eventually cover everything. Everything from digitalisation firms to AR companies can be found underneath its umbrella. Therefore it's hardly surprising to see a company already featured on our list of the 10 biggest fintech deals from October, also found its way into this list.
Automation Anywhere, however, isn't really a straightforward fitnech or metaverse company. Still, it being a provider of robotic process automation software solutions and it having received $200m in financing from Sillicon Valley Bank, SVB Capitol and Hercules Capital grants it a spot on both the fintech and metaverse deal list for October.
The financing will be used to provide strategic and operational capital over the next several years.
“We continue to be optimistic about the near-term opportunities for Automation Anywhere, as more companies scale automation and use the flexibility of our cloud platform to mitigate the impact of global events and navigate market challenges,” said Mihir Shukla, CEO and co-Founder, Automation Anywhere.
Automation Anywhere provides businesses across the world with robotic software to help power their business.
OpenWeb secures $170m in Series F Financing
OpenWeb, the community engagement platform which is striving for a “healthier open web”, received $170m in a funding round by Georgian in October, making it one of the biggest metaverse deals of the month.
The funding will be used to finance the company’s growth, which recently hit over 100m active users. It hopes to pursue new publishers and advertisers, as well as work with industry-leading applications.
"This investment represents an incredible show of confidence in the mission we have set for ourselves: To combat toxicity and create healthier, open spaces for conversations that move society forward," said Nadav Shoval, co-founder and CEO of OpenWeb.
Versa Networks receives $120m from BlackRock and Silicon Valley Bank
Versa Networks, the leader of single-vender Secure Access Service Edge (SASE) platforms, received $120m in additional funding from BlackRock and Silicon Valley Bank in October.
SASE is a cloud-based enterprise security framework that addresses security and network challenges that can be caused during digital business transformation. Versa will use the cash injection to maintain its position in the SASE market and expand its innovations in the sector.
“As the leader in SASE, the fastest growing security and networking category, and executing on SASE services for years, Versa is the only solution proven to deliver the industry’s leading and differentiated architecture for high performance and security,” said Kelly Ahuja, CEO of Versa Networks.
Stability AI secures $101m in seed funding
Stability AI, a UK-based company that designs and implements solutions using augmented technology, received $101m in seed funding from Catue, Lightspeed Venture Partners, and O’Shaughnessy Ventures in October.
The company will be using the funding to push forward its development of open AI models for language, video, 3D, and image - to be used by consumer and enterprise use cases around the world.
Zhongke Yihaiwei secures $69m in Series E funding
Zhongke Yihaiwei, a China-based manufacturer of artificial intelligence chips, received $69m in funding from CDB Manufacturing Transformation on 20 October.
The funds will be used for the development and research in the decision-making intelligence field, as well as to build up its talent teams.
BeReal Secures $60m in Series B Venture Funding
BeReal, the social media app which has risen to mainstream popularity in 2022, secured $60m in venture funding in October.
The France-based photo-sharing application recorded around 43m downloads of the app back in August.
Launched in January 2022 by Alexis Barreyat, former video producer on GoPro, the app has managed to stand out against TikTok and Instagram due to its unique ‘no judgement’ ethos.
Mad Street Den raises $21m in venture financing
Mad Street Den, an artificial intelligence and innovative computer vision start-up, raised $21m in October.
The company provides retailers and brands with its image and video recognition suite to enhance its customer base and revenue across a variety of social channels.
The AI company hopes to raise a total of $36m in venture financing.
GlobalData is the parent company of Verdict and its sister publications.