By 2024, the metaverse may become a $800 billion market, according to Bloomberg Intelligence. They predict that more than $400 billion of this share will be allocated to online games and gaming equipment, and the rest will be divided between social networking and entertainment. Banks are most certainly going in, as well.
But the biggest boom has come from tech startups that are entering the metaverse with energized thinking and creativity. The metaverse is still in its very infancy (also depending on your definition of the term), but taking the risk of bringing new technology and ideas to the virtual world is a sure way to lay the groundwork for a potential unicorn.
Investors, however, stand a good chance of making big gains should one take off. In the year 2022, the entrants into the metaverse are approaching the thousands, which is why we have compiled a list of the top 5 tech startups in this dynamic field that have already received first-round funding and are already collaborating with large companies.
But before we begin…
If you’re a complete beginner to the world of the metaverse or an expert, the book, The Metaverse: A Professional Guide* by Tom Ffiske, is an excellent overview that lays the groundwork for metaverse investing.
Let’s start. Here is our list of top 5 tech startups to watch in the metaverse space in the year 2022.
#1. InWorld AI
In November 2021, Silicon Valley startup, Inworld AI, managed to raise $7.2 million in investments. Inworld AI technology makes it possible to create virtual agents capable of recognizing the environment and context in which they find themselves. Such characters can be used in various spaces, including the metaverse, VR/AR or games. Ilya Gelfenbein, head of Inworld AI, is confident that business demand for the virtual capabilities offered by Meta and other companies will grow rapidly.
Previously, the co-founders of the company worked on API.AI, which was bought out by Google Corporation and renamed Dialogflow. This artificial intelligence platform understands natural speech and allows the creation of virtual speakers. However, now it is part of Google Cloud AI and the Google Assistant Developer Platform.
But Inworld AI goes beyond this and is far more ambitious. The team is working on a platform that will allow the creation of virtual characters capable of recognizing the environment and context in which they find themselves. Their artificial intelligence platform is undoubtedly the most advanced out there in this area.
Why would InWorld AI be important in the future? Avatars are undoubtedly a key part of interaction in the virtual space, which is why their foothold in this space is significant.
For more information, visit the Inworld AI website.
#2. Improbable / MSquared
The next startup on the list is UK-based, Improbable. The company launched MSquared, which has raised $150 million to find ways for visitors of different metaworlds to interact. Improbable, a subsidiary of gaming startup M² (MSquared), will focus on Web3 development to “bring large-scale metaworlds to life”. This interaction is blockchain-based where the end goal is to make it possible for users to move their crypto-assets and non-transferable tokens (NFTs) between digital worlds.
The new project will also work on the compatibility of metaworlds to allow users to use the same items in different worlds. The project will use Improbable’s Morpheus technology, which allows for detailed worlds over 10,000 live players, as well as new Web3 tools and technology.
MSquared has already raised $150 million at its own market valuation of $1 billion. The funding round was led by venture capital fund Andreessen Horowitz and Softbank. Other participants included – Ethereal Ventures, SIG, Digital Currency Group, Mirana and CMT.
For more information, visit the Improbable website.
The startup AllSeated was launched in 2015 in San Francisco. Originally, the founders simply wanted to incorporate digital tools into event management, but now their platform has become a visualization powerhouse. In the initial stages, users were limited to viewing and changing the hall or floor plan in 2D, drag and drop various elements, and adjust the guest list and seating chart.
But then the company realized that there was demand for something more advanced than that.
The startup’s founder, Sandy Hammer, discovered that when an event is displayed in 3D, it greatly increases sales. Therefore, in 2018, a new product called “Vision” emerged that allowed AllSeated customers to visualize events in 3D.
Today the platform is extremely advanced and AllSeated offers customers to customize a range of interior details. For example, you are able to choose furniture, object colors, tableware, and decorations. AllSeated is supported by Oculus Go, Gear VR, and Vive.
According to PitchBook, the company raised $4.4 million in investment in February 2020, and investors invested another $7 million in AllSeated in May. At the height of the pandemic, when all events went online, AllSeated presented exVo, a virtual event platform, which has also garnered success.
For more information, visit the AllSeated website.
If you think avatar interaction is already an advanced feature in the metaverse, this next startup promises to take it to the next level in relation to the sense of touch.
First appearing in 2012 with the support of industry giant, Sony, Japanese company H2L has developed a device that allows you to feel physical pain in virtual reality. That’s right, pain. Not a slight brush on your shoulder, but real pain.
The device comes in the form of a bracelet that registers human muscle contractions, allowing the user’s avatar in the metaverse to repeat his or her movements, and the person, in turn, to feel the presence and weight of objects. The technology is, undoubtedly advanced, but the bracelet uses electrical stimulation to affect the muscles in the arms, allowing the user to mimic the sensations of events in the virtual world, such as catching a football or doing a karate chop. In this sense, with H2L’s electrical stimulation device, people will be able to sense everyday things in the metaverse.
“The sensation of pain allows us to turn the metaworld into the real world, increasing the sense of presence and immersion,” says Amy Tamaki, executive director and co-founder of the Tokyo-based company. It plans to completely free humans from the constraints of space, time and sensation by 2029.
For more information on H2L, visit their website.
#5. Somnium Space
This last startup hails from the Czech Republic. Somnium Space is an open social virtual reality platform built on blockchain. Users are able to buy virtual land and build almost anything they want on the platform. For example, homes, cinemas, parks and schools. It is compatible with a VR headset, browser, or smartphone. It is its own metaverse community.
But this isn’t any other part of the metaverse that we’ve seen. Oh no, this is one where users will be able to live forever due to its “Live Forever” mode said to have been implemented after the CEO, Artur Sychov, lost his father to cancer, according to CNET. The level of immersion in the Somnium Space metaverse is, therefore, on a completely other level and it is built by the inhabitants themselves.
To build this world, they use special programs, the likes of Builder and UnitySDK. The former allows you to create physical objects, such as houses or objects of decoration. The latter allows you to upload your own avatars and animations.
Somnium Space is undoubtedly one to watch as the competition for the ultimate metaverse platform continues.
For more information about Somnium Space, visit their website.
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