Welcome to this month’s viewpoints, news and investment activity covering the Metaverse, XR and Spatial Computing - brought to you by FOV Ventures.

This Month:

• New investment - into the building blocks of the VR/AR industry

• The future of advertising in virtual worlds

• State of the Venture industry

Dave Haynes, Petri Rajahalme and Sointu Karjalainen (FOV Ventures)

FOV have just been at Google’s Startup Day in Helsinki. Dave was on the VC panel alongside Alliance, Maki.vc and Antler.

As well as talking about Google’s Gemini and how founders can navigate the current AI landscape, there was a focus on the current VC climate. Even if it’s a challenging climate to raise in there is still dry powder and active VC’s out there, like FOV and fellow panelists.

The European startup fundraising landscape is showing some signs of recovery from the slowdown in 2023, with total deal value of €16.3 billion in Q1, a 19.1% increase YoY. Regional insights are that while the UK maintains a high deal count, it was down on value, and areas like the Nordics are catching up with substantial gains in deal values.

There was also a timely report from Pitchbook which discusses the dynamics of VC fundraising - showing a cautious but opportunistic market with €4.6 billion raised across 47 new funds. Contrary to expectations these were primarily smaller funds, which indicates a shift from larger to niche, or more vertical venture capital vehicles.

For founders - tips from the panel:

👉 When you’re approaching VCs, instead of pitching what you do, try asking the VC first ‘How do you invest, are you currently actively investing?’ Not only do VCs love to talk about their work, but talking about their investment strategy and activity upfront ensures alignment of interests and fit.

👉 The time taking to close rounds is increasing. The average fundraising duration is now 1.7 years, plan for a 18-24 month runway if you can. In response, founders now need a dual-focus on raising and generating revenue/maintaining traction during this period. While seeking the next round of funding, ensure the company continues to demonstrate growth and market fit to potential investors.

Thanks to Joseph Michael from Google for hosting us at Google Startup day!

FOV News

Unveiling our Latest Investment!

This month, we welcome Kubos Semiconductors to the FOV portfolio.

Who:

Kubos Semiconductors is a microLED material technology company based in Cambridge and Cardiff, UK, dedicated to advancing cubic gallium nitride (GaN) technology. They are focused on developing efficient red microLEDs for displays, primarily targeting the AR/VR industry.

What:

The funding and strategic support are directed towards overcoming technological barriers in the AR/VR sectors by improving microLED efficiencies, particularly in the production of red LEDs. These advancements are crucial for enhancing the performance and reducing the cost and form factor of AR/VR headsets.

Why:

Despite the AR/VR industry’s growth, it is often held back by hardware issues such as limited battery life, device overheating, and poor visibility in bright conditions. MicroLED technology promises to solve these issues by providing brighter, more energy efficient displays, capable of higher performance compared to traditional LCDs and OLEDs.

How:

Kubos utilises cubic GaN, a unique form of gallium nitride, to increase the efficiency and output of red microLEDs. This cubic structure allows for smaller, more powerful, and cost-effective displays. Their advanced semiconductor processing techniques also enhance the performance and scalability of microLED production.

Led by CEO Caroline O'Brien, Kubos features a robust team supported by industry stalwarts Martin Lamb, Geoff Haynes and Drew Nelson OBE, and we are joined on this round by the Development Bank of Wales and S4C Digital Media Limited.

Click below to learn more about Kubos, and our rationale in investing.

Boost VC’s Deep Tech Demo Day hosted 3 FOV portfolio companies.

• Ray Browser - The world’s first gaming browser. Ray is the fun way to experience the internet.

• Starstuff - Spatial imaging AI startup for deeper human connection online.

• YourHaven - Mixed reality platform building the future of immersive mental well-being.

Initiatives like Boost’s Deep Tech Demo day are key to getting the next gen of computing funded! We saw space, robotics, new materials, VR + much more.

Below, Petri and Dave witnessed the demo day while using the new 'Spatial Personas' for the Vision Pro. These bring your photorealistic 'persona' avatar fully into virtual spaces, meetings, hangouts and other experiences.

Simply FaceTime your contacts (max 5) in headset, then turn on sharing from any integrated VisionOS app. One of our biggest criticisms of the Vision Pro so far has been the lack of social/ multi-user experiences. Apple have now finally shipped this feature and in a simple but elegant way, and its a gamechanger.

The New Medium That Brands Can't Ignore

FOV Portfolio company GEEIQ - the leading metaverse insights provider for brands was part of history last month. They supported a virtual world’s first introduction of real-world commerce on Roblox’s Walmart Discovered experience.

The Walmart brand experience has had over 20 million visits and now Roblox users can purchase real-world items directly in Walmart Discovered, and receive a virtual twin as a free UGC item.

David Ripert, FOV Entrepreneur-in-Residence, hosted a great interview with Charles Hambro, CEO and Founder of GEEIQ.

This is a timely conversation, at a watershed moment for brands in gaming and virtual worlds. For some time, the brand opportunity in these spaces has been centred around awareness, with KPIs focused on metrics like visits and time spent.

Now, with Walmart embracing real-world commerce through its Roblox experience, the transition to virtual worlds and gaming platforms as full-funnel marketing channels is well underway.

Charles explains all, and goes into detail about the future value for brands, startups, and developers on platforms like Roblox, Fortnite, Zepeto, VRChat and more!

Heading to AWE?

AWE is treating us with a generous 20% discount on registration for everyone. Simply use the code 24FOVD at checkout! 🤝

Portfolio News:

• Scenario’s AI Unity plugin is a must see!

• YourHaven Mixed Reality update.

• 25 Year industry vet joins Iconic AI

• Graswald breakdown 3D product visualisation for e-commerce, its impact on customer engagement and sales, and how retailers can leverage it at scale.

• Move.ai involved in creating a digital twin of a football game at Wembley - super cool!

FOV Job Board:

• Virtex are hiring a Cinematic Artist/Designer to support on a contractual/part-time basis.

• GEEIQ hiring for two new roles.

• Move.ai looking for new social media manager.

• M-XR, best known for developments in material capture technology, are hiring a Graphics Engineer