Which Types of Capital are Funding the Metaverse?

The metaverse is on the rise, in part due to Facebook’s announcement of their name change to Meta. The metaverse, a phrase coined by science fiction writer Neal Stephenson, refers to an augmented reality experience powered by an expanded internet. The technology behind the metaverse, like virtual reality (VR) or augmented reality, has seen a significant increase in funding recently, as many investors are pouring billions into developing metaverse technology. Below are a few examples of different types of capital that are currently funding the metaverse sector, and what sorts of ROIs may be seen from this funding. 

Individual Stocks: 

Many investors are buying larger shares of individual stocks in metaverse companies, like Meta or Roblox, or Microsoft. These shares will no doubt increase in value as the metaverse continues to grow in popularity, generating a tidy ROI for any venture capitalist. 


Other companies are looking to invest in ETFs. One company, Roundhill Investments, offers a Roundhill Ball Metaverse ETF which helps to expose investors to the metaverse with investments in a Ball Metaverse Index. Roundhill has created this ETF as they show studies predicting the metaverse revenue reaching $400 billion by 2025, which would be a rather profitable ROI. 


Other younger investors are investing directly into specifically virtual reality online games by paying cryptocurrency to play these games. Cryptocurrency, like bitcoin, is run on software called blockchain, which helps to make the currency secure and more efficient. For these games, having users pay cryptocurrencies has increased their ROI significantly. One specific game, Axie, was designed so users could create their own virtual monsters (“Axies”) and sell them as NFTs (non-fungible token) which also uses blockchain. Over the past few months, Axie saw a total of over 2 million Axies sold, amounting to $639.5 million. This is just one example of how cryptocurrency is used to fund metaverse games, as many other games have found similar results. 

Many large corporations, like Meta and Microsoft, are putting large amounts of capital into developing metaverse technology, which is only increasing the revenue of the market. Many metaverse startups, like Inworld AI and GuildFi, have already found themselves with revenue in the millions because of the increase in capital. Time will only tell how many more startups see a revenue increase due to the metaverse’s increasing popularity 

Photo Courtesy of Freepik.com

Kenna Hughes-Castleberry

Kenna Hughes-Castleberry

Kenna Castleberry is the Science Communicator at JILA (formerly known as the Joint Institute for Laboratory Astrophysics) at the University of Colorado, Boulder.

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