Metaverse Investors Remain Bullish Despite Adoption, DEI Concerns

Despite rocky economic conditions and some high-profile bad press around the metaverse — an immersive, shared virtual environment people access via the internet — investors are feeling optimistic about what some are calling the future of the web.

Venture capital and institutional investor investments in the metaverse currently make up nearly half of investor assets, with the expectation to increase over the next five years, according to a survey by KPMG.

The report was based on insights from 302 institutional investors, including commercial banks and funds, as well as 103 venture capital firms/funds, and found a full three-quarters of investors plan to maintain or increase their metaverse investments over the next five years.

Related: Special Report: Metaverse in the Enterprise

Client interest in the burgeoning technology appears to be a core driver in metaverse investment, cited by 64% of respondents, followed by a desire to pursue emerging technologies and potential to reach new audiences and customers.

Venture capital funds seem particularly keen on investing in the metaverse, with nearly three-quarters of respondents citing emerging tech investment as the reason for increasing or maintaining their bet on the metaverse over the next five years.

Regulation, Privacy Issues Concern Metaverse Investors

While there is a general sense of optimism over the metaverse, seven in 10 investors surveyed said they have concerns over various factors, from regulation and privacy to worries about adoption levels.

Anu Puvvada, KPMG studio leader and interim metaverse COE leader, explained that while it has yet to be seen which metaverse platforms and capabilities will have the most sticking power, approximately 90% of VC and institutional investors predict the metaverse is the next phase of the internet.

"It is clear investors are looking past current macroeconomic factors and consumer adoption rates and envision a future where the metaverse is utilized for work meetings, trainings, and learning experiences," she said.

Puvvada noted that this confidence, however, hinges on factors like the prospects of improved interoperability across metaverse platforms, broader workplace adoption, and more affordable hardware options.

Since it is uncertain which products and platforms will gain widespread traction, early investment keeps metaverse investors in the game regardless of how individual technologies evolve, she added.

About one-third (36%) of investors surveyed said they have missed windfall opportunities from not investing or investing too little in metaverse technologies so far.

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Diversity, Equity, and Inclusion a Priority for Metaverse Investors

Diversity, equity, and inclusion (DEI) in the metaverse is a key concern on investors' minds, according to the survey.

With the metaverse in its nascent stages, there is an opportunity to build a more inclusive culture from the start. Affordability, avatar customization, and governance are all priorities.

Thirty-eight percent of investors cited providing more access to affordable metaverse technologies as key to creating an inclusive metaverse experience.

The second and third most important factors for ensuring DEI in the metaverse are the ability to customize avatars to represent people of all backgrounds (34%) and establishing acceptable forms of governance through a combination of encoded rules and social norms (33%).

Related: Women Are Key Metaverse Users, But Men Dominate Jobs Shaping It

"To create an equitable future with these technologies, we need to activate new tactics to increase broad adoption and bring costs down," Puvvada said. "Early education, specialized training, and upskilling will play pivotal roles in promoting metaverse education and familiarity to users."

She pointed out that some "encoded rules and social norms" that can support DEI in the metaverse would include ensuring authenticity of users and enforcing no-tolerance policies when it comes to discrimination and offensive language.

Almost seven in 10 organizations say they plan to do business in the metaverse within the next three years, according to a December Tenable survey of 1,500 professionals representing roles in cybersecurity, DevOps, and IT engineering.