Macron’s dream of a European metaverse is far from a reality

European companies, investors and talent are all vying for a ticket on the Metaversum hype train. Even political heavyweights are making moves — or at least declarations.

French President Emmanuel Macron wants to build “a European metaverse” to challenge US and Chinese tech giants. Meanwhile, EU digital boss Margrethe Vestager is considering new antitrust law. But their ambitions are far from being realized.

“The fact is that there is no relevant European big tech player in this whole Metaversum future,” says Rolf Illenberger, co-founder of Munich’s VRdirect, a virtual reality platform for businesses. “It’s defined by US and Asian players. Those are the two regions where this technology will develop.”

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In the US, tech titans Meta, Microsoft and Apple are all set for starring roles Roblox and decentralized already offer popular proto-metaverse platforms.

Your biggest global challengers are in Asia. Bytedance, the owner of TikTok and VR hardware giant Pico, is its closest competitor, but further competition is emerging from Huawei, Tencent and co The sandbox virtual world.

European startups lag behind their American and Asian counterparts.

Europe, on the other hand, is largely limited to niche providers and start-ups. These range from Finland’s Varjo, which makes high-end headsets, to Estonia’s Ready Player Me, a cross-game avatar platform that recently raked in $56 million in a funding round led by VC giant Andreessen Horowitz.

Jake Stott, CEO of Web3 and advertising agency Metaverse hype, is also optimistic that Europe’s renowned fintech sector can spawn future payment providers in space. However, he acknowledges that they face significant challenges.

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“Historically, European startups have stayed behind their US and Asian counterparts when it comes to making unicorns,” he says. “Europe also lags behind the US in terms of venture capital raised. This is perhaps one of the areas where government support can help the continent’s fledgling metaverse ecosystem – by removing barriers to growth and incentivizing VCs.”

Europe’s Metaverse funding problem

Petri Rajahalme has his own plans to fill the funding gap. Finnish entrepreneur and his business partner Dave Hayes recently started FOV ventures, the first VC firm specializing in early-stage Metaverse companies in Europe. In March, the duo announced a €25 million fund for startups in the pre-seed or seed phase.

“We don’t lack talent, that’s for sure,” says Rajalhlme. “If you look at historical M&A, many companies are in the US [businesses] talent is coming from Europe… The big question is how do you keep that talent in Europe?”

Rajahalme (right) was formerly Managing Director at Nordic XR Startups Fund, while Haynes (left) previously ran HTC's $100 million Vive X fund in EMEA.