The Metaverse is the hottest buzzword in tech, both universally and in Israel. Israeli tech is aiming on playing a significant role in the Metaverse, with research by seed and pre-seed venture capital firm Remagine Ventures showing that the local landscape already includes almost 50 companies that are active in this blossoming sector.
“Gaming is an entry point to the Metaverse, and we have very strong gaming talent in Israel and a growing group of B2C entrepreneurs who are at the cutting edge of consumer trends like NFTs, DeFi, etc.,” said Eze Vidra, Managing Partner at Remagine Ventures. “A lot of them are waking up to the big opportunities in this market and we expect to see the number of companies in this space grow rapidly.” According to Vidra, several of the large tech companies have significant teams working on Metaverse related tech (including Meta, Snap, Unity, etc) that could also play a role in future acquisitions and talent spinning out to build Metaverse related companies. “From a tech perspective, a lot of the challenge of the Metaverse will be addressed by technology that leverages AI: computer vision, synthetic media, NLP, and Israel has a strong cluster in these areas,” explained Vidra.
Metaverse went from relative anonymity to a household term following Facebook’s rebranding to Meta in October 2021, a move designed to capture the trillion-dollar valued social network’s intention to become a metaverse-focused company within five years. Several other tech giants quickly also shared their aspirations to build the Metaverse including Microsoft, Nvidia, ByteDance, Samsung, Google and others.
Although the term Metaverse is still being defined, in its essence it’s a virtual environment where people can play, shop, socialize, and work. It’s a combination of virtual reality, augmented reality and virtual worlds. Some define the Metaverse as a point in time when our digital lives become more important than our physical ones. As people’s attention is wandering toward digital screens, money and resources will follow. According to the State of Mobile 2022 by App Annie, consumers in the top 10 mobile markets spent 4.8 hours a day on mobile (a third of their waking hours). This trend was accelerated by Covid-19, but by no means is the virus the main driver. In addition, consider that in 1999 only 4% of the population was online. In 2020, it was 62%. The result is a $1 trillion opportunity with a potential to disrupt every aspect of our online lives, according to Jefferies analyst Simon Powell.
In order to identify the Israeli companies active in the Metaverse landscape, Remagine Ventures divided up the sector into several field: Decentralization (Crypto, edge computing, web3), Spatial Computing (3D engines AR/VR/XR multi-tasking UI), Creator Economy (design tools, asset markets, work-flow), Discovery (ad networks, social curation, stores, enablers), Experiences (games, e-sports, social, shopping, collectibles).