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

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

French President Emmanuel Macron wants to build “a European metaverse” to challenge American and Chinese tech giants. The EU’s digital chief, Margrethe Vestager, is meanwhile considering new antitrust rules. But their ambitions are far from being realized.

“The reality is that there is no European major technology player that is relevant in that whole metaverse future,” said Rolf Illenberger, the co-founder of Munich’s VRdirect, a virtual reality platform for enterprises. “It is determined by American and Asian players. Those are the two regions where this technology will develop.”

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In the US, the tech titans of Meta, Microsoft and Apple are poised for leadership roles, while Roblox and Decentralland already offer popular proto-metaverse platforms.

Their biggest global challengers are located in Asia. Bytedance, the owner of TikTok and VR hardware giant Pico, is the biggest contender, but more competition is emerging from the likes of Huawei, Tencent and the sandpit virtual world.

European startups are lagging behind their American and Asian counterparts.

Europe, on the other hand, is largely limited to niche operators and startups. These range from Finland’s Varjothat produces high-quality headsets, to Estonia Ready Player Mea cross-game avatar platform that recently raised $56 million in a funding round led by VC giant Andreessen Horowitz.

Jake Stott, CEO of Web3 and metaverse advertising agency hype, is optimistic that Europe’s renowned fintech sector can produce future payment providers in the space. However, he recognizes that they face major challenges.

“Historically, European startups left behind their American and Asian counterparts when it comes to producing unicorns,” he says. “Europe is also lagging behind the US when it comes to attracting venture capital. This is perhaps one of the areas where government support can help the continent’s fledgling metaverse ecosystem – by removing barriers to growth and creating incentives for VCs.”

Europe’s metaverse financing problem

Petri Rajahalme has his own plans to close the financing gap. The Finnish entrepreneur and his business partner, Dave Hayes, recently launched FOV companies, the first VC firm to specialize in metaverse start-ups 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 historic mergers and acquisitions, many of the companies that [businesses] have hooked up talent from Europe… The big question is how do you keep that talent in Europe?”

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