The metaverse could represent a $1 trillion market by the end of the decade, according to CB Insights, which found that in the third quarter of last year, executives mentioned the word “metaverse” a record 68 times. In 2021, over $10 billion in venture funding went to companies related to the metaverse.
“The fashion industry will be one of the first to be most disrupted by blockchain technology. The emergence of new business models, digital use cases for fashion and meta-commerce are all contributing factors,” says Kaspar, CEO and co-founder of Magnetic, and a founding member of Red DAO, which has invested in the digital fashion startup DressX and “virtual human” company Aww, among others. “Unlike the industry response to Web2, many brands and businesses are quick to see the opportunities this disruption offers and are embracing it with unimaginable speed.”
This is significant for retail and fashion brands that rely on startups to innovate. A report this month from Cowen managing director Oliver Chen called the metaverse “the new shopping mall,” while noting the need for frictionless payments and technology and for easy-to-use augmented reality software and hardware. wear. “The metaverse is an early-stage reality, but there is no doubt that it will be the next version of human interaction. For retailers and brands, it’s important to three-dimensionalize products, partner with metaverse developers, and pick a place they want to attract customers to,” Chen wrote.
Recent high-profile ventures and acquisitions, such as Nike’s December acquisition of the Rtfkt “Digital Supreme” brand, have served as a tailwind for other startups. “Rtfkt, in a way, was a model, with crazy drops and associations with high-end brands. When we see that many of these digital buzzwords work really well on Web3, we can begin to understand how there can be more than one,” says Maidment.
While many of these companies are breaking the mold, some old investment rules still apply, especially as the space becomes saturated and the hype levels off. “If the experience itself isn’t fun, no one stays,” says Mullins. “As we enter the channel of disillusionment, it means that we are beginning to see the requirements of the old school; you better know how to build a product that can capture the value of a community.”
To make sense of the metaverse’s budding fashion business, we look at companies that have received recent funding rounds and their investor-backed ambitions.
The Fabricant: A Co-Created “Metaverse Wardrobe”
With its recent $14 million funding, led by Greenfield One, with the participation of Ashton Kutcher and Guy Oseary’s Sound Ventures, Red DAO and others, Amsterdam-based digital fashion house The Fabricant aims to turn a corner. The company, founded in 2019, is evolving into an NFT and digital fashion creation studio whose technology is within the reach of other creatives. In addition to its Series A round, The Fabricant, which counts H&M and Adidas as previous clients, also received a “mega grant” from Epic Games, whose Unreal Engine software The Fabricant uses. The original customer services model “always kept us from becoming the digital fashion house we envisioned,” says Murphy.