On Friday, Dec. 3, TechNode talked to three venture capitalists about investment trends and opportunities in the metaverse, a popular concept referring to the next iteration of the internet. This conversation took place during an open panel discussion at the Beyond Expo tech conference, held from this past Thursday to Saturday at the Venetian Macao Convention and Exhibition Center in Macau.

The text below has been edited for clarity and brevity.

Ken Xu, partner with CMC Capital headquartered in Shanghai: 

It would be exciting to see who can formulate this system and establish the virtual world’s economic system. That’s why many people are investing in blockchain technology. 

Ken Xu

If we’re following a common investment logic, most investors will think about investing in devices that will allow people to access the virtual world. For example, one would think of investing in computer equipment in the past because people needed a computer to access the internet. 

However, if you think of this question from the bottom up, there should be many investment opportunities for components integral to those devices and hardware, such as circuits for AR and VR devices. 

Ken Xu, partner with CMC Capital at the 2021 Beyond Expo (Image credit: Beyond Expo)

Secondly, I think there are opportunities in setting up new business models and new economic models. For example, a virtual world like the metaverse will need an underlying structure to support the operation of the world. It would be exciting to see who can formulate this system and establish the virtual world’s economic system. That’s why many people are investing in blockchain technology. 

Thirdly, there are opportunities in business-to-business applications. Businesses in tourism and logistics will have many needs for metaverse-related applications. We may find opportunities worth investing in these areas. 

Jia Ke, founding partner of Creation Venture Partners headquartered in Shenzhen: 

I think of investment opportunities in three key places: immersive, entry point, and real-world spaces. 

We have invested in one of China’s biggest chain stores offering VR devices for people to try out and play with. There are opportunities in that area. 

Another is investing in entry points, which I think lies in interactivity. Good interaction will bring more people into the virtual world. 

Jia Ke, founding partner of Creation Venture Partners at the 2021 Beyond Expo (Image credit: Beyond Expo)

Lastly, I think there are opportunities in physical spaces. For example, we recently invested in a company that excels at doing interactive art space in the real world. The company collaborated with a Chinese public company to build a digital art museum last month, which is located near the pier in Shenzhen. They remodeled an abandoned factory into an art space that offers viewers some virtual experiences. 

Chen Wensi, partner with Hongtai Aplus headquartered in Beijing: 

We have been investing in the metaverse for a while. Some of our previous investment cases can also be put into the metaverse category now. For example, we invested in the AR glass maker Nreal around 2015 and 2016. We also invested in Corigine, a company that focuses on DPUs (data processing units), and brought us eight times in investment returns since last year. 

I’m also working on my own startup called Yika, a metaverse company for the cultural sector. I started thinking about the idea two years ago. I was thinking of displaying arts and creative things in 3D and giving viewers a more immersive experience. The idea sounds like part of the metaverse. We are building it from the bottom up. We have made a consortium blockchain, and we are the exclusive platform working with the Copyright Protection Center of China … We offer a full service in intellectual property protection (for digital cultural products), including trading, displaying, and protection.

Chen Wensi, partner with Hongtai Aplus at the 2021 Beyond Expo (Image credit: Beyond Expo)