FOV Ventures: an introduction

Investing in founders building the Metaverse

Petri and myself are thrilled to launch FOV Ventures, the new European venture fund investing in founders building the Metaverse. Last week we announced the first close of €16.5m of its target €25m fund.

You may already know us individually through our time spent building companies like SoundCloud or supporting the XR ecosystem in Finland. We’ve also invested into early stage Metaverse startups as angels and at funds including Seedcamp, Nordic XR Startups (NXS) and HTC’s Vive X. But for those who don’t, we’d like to take the time here to introduce ourselves and the underlying thesis behind our new fund.

TL;DR

• FOV Ventures is the go-to fund in Europe for ambitious founders building a startup for the Metaverse
• We believe the Metaverse is a major expansion of the Internet and is a multi-decade, multi-trillion dollar opportunity
• We make initial investments of up to €500k, primarily at pre-seed and seed stage, alongside value-add angels and top-tier funds
• We’re not new to the Metaverse, both partners are industry veterans, having invested and operated in the space in various forms since 2016
• FOV is a specialist fund, adding value through domain expertise and our ‘Edge Network’, a community of over 25 industry leaders and advisors that help source and support our investments

So what exactly is the Metaverse?

We got this question a lot whilst raising the fund. In 2020 we were already talking about the Metaverse, along with folks like Matthew Ball and Jon Radoff that have done a great job in establishing frameworks for how to think about it. But until recently, the term was met with blank faces from most LP’s. Everything changed in late 2021 with Facebook’s ‘Meta’ announcement. But the challenge then became explaining exactly what we meant by the Metaverse as everyone rushed to get their own definition heard.

Do we have our own single definition of the Metaverse? No. And we actually don’t think it matters. Just as terms like the Information Super Highway were used while companies like Google, Amazon and Netscape were building out the first iterations of the Internet, it’s quite possible that in 10 years we won’t be talking specifically about the ‘Metaverse’ either.

But to get a little bit more specific, for us:

the Metaverse represents a major expansion of today’s Internet which primarily exists through 2D screens, websites and mobile apps. And this new spatial web, or Metaverse, will be more immersive, is built with new tools such as real-time 3D game engines, and spans an increasingly blurred line between the digital and physical.

We believe that in the future the Metaverse will primarily manifest itself through persistent and interoperable virtual worlds, which can either standalone or be seamlessly merged with the physical world around us. And we also believe that increasing the openness, interoperability and diversity of the Metaverse will bring the most value for all of its participants.

Why setup a fund dedicated only to the Metaverse?

Just like Satya Nadella at Microsoft and Tim Sweeney at Epic, we believe the Metaverse represents a multi-trillion dollar opportunity over the next decade. It will totally disrupt the way we play, socialize, collaborate, learn and create. It will likely touch the majority of professions and even create new ones. And to realise its full potential we believe that a new generation of startups and entrepreneurs should play an outsized role in building it.

Just like in the first Internet era and then the rise of mobile, the Metaverse will unleash a new generation of billion dollar companies. The mission of FOV Ventures is to identify, support and invest in the founders that are building those companies.

As a specialist fund we believe we’ll better placed to do that than most. But with such big potential comes a lot of hype and then plenty of noise. Our job is to find the signal within that noise, to understand which ideas offer the biggest opportunity and at the right point in time. Petri & I have already invested through at least one hype cycle, have built up strong pattern recognition in our focus areas and can spend more time than others on deep-diving into new themes and opportunity spaces that arise. As a specialist fund we also believe we can be a lightning rod for the very best European talent that want to build but need the capital to start their journey.

To help us do this we’re build a community of other individuals, experts, founders and partners who all share our vision. Later this year we will be looking to hire a community and operations lead and part of this role will be to continue building out and operationalising FOV’s ‘Edge Network’, a global community supporting the fund and its portfolio companies, as well as scouting potential investments. Individuals already in the network include leaders from the major tech platforms, including Meta, Epic, Google and Snap, as well as technical experts and exited founders. Examples include Matt Miesnieks, founder of spatial mapping startup 6D.ai, a company acquired by Niantic and Jussi Mäkinen, CMO of Finnish mixed reality headset maker Varjo, who brings branding expertise from roles at Rovio and Nokia. The community is still being expanded with more to be announced in the coming months.

What specific areas will you invest in?

Our Metaverse thesis gives us a broad canvas to invest within. And there are a number of technology drivers and overlapping adjacent areas that we’re excited by too, whether that XR, spatial computing, web3 etc. Definitions will continue to change and our thesis will evolve from one fund to another, but some key principles remain the same.

We believe the Metaverse will fundamentally change many aspects of the way we work, the way we play, and will require new infrastructure and tools to build it with. This means we’ll be investing in companies that address both consumer and enterprise users, as well as startups serving developers and creators.

To give a few more tangible examples, here are some specific areas that we’ve already been actively taking a look at:

Identity & Avatars — if the Metaverse is an embodied Internet then the first thing that users will care about is how they appear and how they manage their identity(s). Companies like ReadyPlayerMe are becoming the go-to interoperable avatars, supporting over 1000 ‘Metaverse’ platforms, whilst coming from a web3 perspective, companies like Crucible are galvanising communities to think about how we manage our different personas and assets in a decentralized, open Metaverse.

Retail — since the Internet began shopping online has meant buying products from static grids on 2D web pages. Over time e-commerce stores added images, video, social, recommendations etc. Now AR and 3D is changing the way that physical goods are marketed and sold, whether that’s virtual try-on or at-home furniture previews. It’s estimated that AR and camera commerce alone will drive $36bn in commerce by 2024. How else will retail change in the Metaverse?

Virtual Commerce — but perhaps an even bigger opportunity in retail is virtual commerce, ie. buying/selling purely digital goods. That could be virtual fashion or any ‘direct-to-avatar’ commerce. But it includes art, architecture, collectibles, hoverboards and many other categories yet to be explored. We now have a solid year of NFT experimentation behind us, with Metaverse-native brands like RTFKT selling to Nike and marketplaces like OpenSea doing $5bn in monthly revenue.

We think things could get really interesting and physical and digital commerce start to merge, which forms part of our excitement behind brands like Rens who plan to take their existing sustainable fashion brand into the Metaverse. And our other angel investments in this space include startups like The Dematerialised, Auroboros and Customuse.

Immersive Entertainment & Social — we’re spending an increasing amount of our leisure time in virtual worlds. This has primarily been playing games (Fortnite, Roblox), but there’s an ever increasing number of verbs happening in these immersive spaces beside running, jumping and shooting. Attending concerts is the obvious example here. I invested in Wave back in 2016 whilst at Seedcamp and since then virtual events like the Travis Scott concert in Fornite have taken the concept mainstream. But it’s now also possible to watch live theatre, go on a virtual date, attend a virtual meditation or art class, go to a virtual museum, watch e-sports, go travelling etc etc.

Future of Work — the pandemic accelerated remote working and reset the way organizations think about new ways to collaborate and be productive. This isn’t just about finding better ways to do Zoom calls, but also spills into new models for education and training or making use of digital twins and simulations of the world, including everything from factories to mining sites and construction projects. Previous investments at Vive X and NXS in these categories included MeetInVR, Bodyswaps, Imaged Reality and Immersive Factory

And as well as rethinking how we do current jobs, we’re also excited about entirely new categories of work that will get created within the Metaverse (performers, virtual architects, DAO contributors, guild leaders, etc) and what types of startups will leverage or support these new roles.

Tools & Infrastructure — in any gold rush it’s usually the people making the picks and shovels that get rich first. At NXS, Petri invested in Immersal, a startup building AR-cloud tools that was acquired by Hexagon. Similar startups such as Scape and 6D.ai sold to Meta and Niantic. To build out the Metaverse we’re going to need new creation tools, AI-assisted content generation and new developer workflows etc. What infrastructure needs to be put in place to encourage interoperability? We also need to figure out how to navigate the Metaverse. What does search & discovery look like, what is the Metaverse equivalent of DNS? What new interfaces and UI will be needed as we spend time in more embodied forms of computing.

This is certainly not an exhaustive list and over the coming months we’ll be taking deeper dives both here on the blog and in our virtual podcast Viewpoints.

Keep in touch

If you would like to get in touch then it’s alway then please ping us on LinkedIn or submit your info on the website. You can also subscribe to our newsletter. Let’s build the Metaverse together…

PS. What does FOV mean?

It’s pronounced F O V. Not ‘Fove’. And yes, it is short for field of view :)

Field of view is the extent of the observable world that is seen at a given time either through someone’s eyes, on a display screen, or through a camera. It refers to the coverage of an entire area, rather than a fixed focal point.