Beijing's first Metaverse Fund of Funds is coming

If nothing unexpected happens, this will also be the first metaverse fund in China.

After much anticipation, Beijing’s first Metaverse Fund of Funds is finally here.

Investment community - Decoding LP learned from the Tongzhou District Financial Office platform in Beijing that with the approval of the district government, the "Several Measures on Accelerating the Innovation-led Development of the Metaverse in Beijing's Sub-Center" (hereinafter referred to as the "Measures") were issued, which proposed: encouraging the development of early and long-term investment. Relying on the Tongzhou Industry Guidance Fund, the "Fund of Funds + Direct Investment" method was adopted to join other social capital to create a fund covering the Metaverse industry.

If nothing unexpected happens, this will also be the first metaverse fund in China.

Beijing's first Metaverse Fund of Funds landed in Tongzhou

Let’s first take a look at the specific content of the policy.

According to the Measures, financial subsidies will be given to Metaverse enterprises for rent. To support the gathering of Metaverse enterprises and service agencies, according to the Metaverse enterprise rent subsidy standards, key enterprises newly registered in the Metaverse Application Innovation Center and renting self-use office space will be subsidized in three levels (50%, 70%, 100%). The subsidized area per enterprise shall not exceed 2,000 square meters per year, and the continuous subsidy shall not exceed 3 years.

There are several key points:

(I) Vigorously promote demonstration applications. Accelerate the deep integration of metaverse-related technologies with various industries, promote industrial transformation and upgrading, focus on the fields of culture, tourism, commerce, etc., create a number of metaverse demonstration application projects, and support the construction of a number of metaverse application scenarios. Provide Beijing Universal Studios, Zhangjiawan Ancient Town, Grand Canal Cultural Belt, Taihu Performing Arts Town and other scene resource support for metaverse-related enterprises in Beijing's sub-center.

(II) Comprehensively optimize the industrial layout. Improve the space carrying capacity of the Metaverse industry and create a "1+N" industrial innovation cluster. In the Zhangjiawan Design Town Innovation Center, gather high-end innovation elements to create a Metaverse Application Innovation Center; in the cultural tourism area, Taihu Performing Arts Town, Zhangjiawan Ancient Town, Songzhuang Art District, Yunhe Business District and other areas, create theme parks that are highly integrated with application scenarios and form Metaverse demonstrations. Support enterprises to extend their R&D and industrial chains to the Beijing-Tianjin-Hebei region, especially the Xiong'an region, to the whole country, and to the world, and continuously expand the industry's influence.

(III) Encourage the development of early-stage and long-term investments. Relying on the Tongzhou Industry Guidance Fund, adopt the "parent fund + direct investment" approach to join other social capital to create a fund covering the Metaverse industry, support Metaverse start-up projects and major projects and extend the support period, further improve the service system, and support the construction of the industrial ecosystem. Support the establishment of a Metaverse sub-fund focusing on early-stage and long-term investments.

This is what VC/PE is most interested in. With a mother fund, VC/PE can apply to invest in the establishment of a special Metaverse sub-fund and invest funds in many Metaverse projects in a market-oriented manner. At the same time, through the return of the mother fund, VC/PE will try to settle the invested Metaverse projects in Tongzhou to form an industrial cluster.

Metaverse financing is booming, and VC/PE is coming

At present, the metaverse is sweeping the venture capital circle.

The concept of the metaverse was first proposed by American science fiction writer Neil Stevenson. In 1992, Stevenson described the metaverse in his novel Snow Crash: Put on headphones and eyepieces, find a connection terminal, and you can enter a virtual space parallel to the real world as a virtual avatar, which is simulated by a computer.

So far, there is no clear official definition of the Metaverse. Some people literally define Metaverse as Meta (transcendence) + Verse (universe), a virtual universe beyond reality.

The sudden popularity of the Metaverse concept can be traced back to the game company Roblox. Since its establishment in 2004, Roblox has been working hard to build a game platform similar to the Metaverse. In March last year, the company officially landed on the New York Stock Exchange. On the day of listing, the stock price soared 54%, and the market value exceeded US$40 billion (approximately RMB 252.9 billion). It is worth noting that major global technology giants are also stepping up their efforts to lay out the Metaverse track.

Facebook's name change directly pushed the popularity of the Metaverse to a climax. In October last year, Zuckerberg announced that the name of the Facebook group would be changed to "Meta" with the prefix of Metaverse. It is worth noting that Nvidia also entered the Metaverse at almost the same time.

All of a sudden, VC/PE heard the news and started to raise funds related to the Metaverse. According to incomplete statistics from the investment community, more than 20 Metaverse companies have received financing since 2021, including Biqverse, Oasis, Dubaoke, BUD, OrientaLab, etc., with VC/PEs such as Sequoia China, Hillhouse Capital, Yunfeng Capital, CPE Yuanfeng, Cornerstone Capital, BlueRun Ventures, Joy Capital, Hongtai Fund, etc., as well as Internet giants such as ByteDance, Xiaomi, and Baidu.

Among them, the most sensational investment event is ByteDance's acquisition of VR startup Pico. At the end of August last year, Pico sent a letter to all employees saying that the company was acquired by ByteDance. It was reported that the acquisition price may be 5 billion yuan, which is also the largest acquisition case in the VR track in China in recent years.

There was a saying circulating in the VC circle before: Although there is no unified definition of the metaverse, it is basically certain that the metaverse is the poetry and distance of the digital world, and AR/VR is the best entrance to the metaverse.

A VC once analyzed that the unchanging trend over the past few decades is that the digital world (programs and protocols) and the physical world (humans and machines) continue to blend and form new networks. This is not a trend, but a long-term trend. Therefore, whether it is the "virtual world", "metaverse", or "real Internet", they are just a cross-section of an annotation of this trend.

A science fiction world is slowly coming.