By 2017, consumer virtual reality (VR) headsets were already in the market, and investors began funding startups built around VR content, tools, and early “virtual world” ideas. This period set the baseline for later “metaverse” fundraising, when startups started pitching persistent 3D online spaces as a long-term platform shift.
Blockstack announced a $25 million fund aimed at investing in teams building blockchain applications. While not metaverse-specific, it reflected a broader shift: venture investors were increasingly willing to fund “builder ecosystems,” which later became common in metaverse infrastructure (identity, wallets, creation tools, and marketplaces).
Andreessen Horowitz launched a dedicated cryptocurrency fund, signaling growing venture appetite for blockchain-based platforms and digital asset business models. This mattered for metaverse startups because many later pitches combined virtual worlds with crypto ownership (for example, tokens or NFTs) to fund growth and create new revenue streams.
In the first half of 2021, global venture capital investment hit a record according to Crunchbase, reflecting unusually easy financing conditions. This wider funding boom helped metaverse-related startups raise larger rounds, because capital was flowing strongly into many high-growth tech themes at once.
Facebook announced it would rebrand the company name to Meta, explicitly tying its corporate strategy to building the “metaverse.” The move helped popularize the term with investors and founders, and it encouraged a wave of startup fundraising framed around immersive social platforms, creator tools, and VR/AR (augmented reality) infrastructure.
Microsoft announced a major deal to acquire Activision Blizzard, framing gaming communities and content as central to its future strategy and often linking gaming to metaverse development. Large strategic moves like this reinforced investor belief that virtual worlds and interactive platforms could become a major technology market, supporting venture interest in related startups.
Epic Games announced a $2 billion funding round to advance its vision for building the metaverse, with $1 billion each from Sony and KIRKBI. Although Epic is not a startup, this round became a major reference point for metaverse fundraising, signaling that large investors were willing to deploy big checks for virtual-world platforms and developer ecosystems.
McKinsey reported that roughly $120 billion had been invested in the metaverse within the first five months of 2022 (across venture capital, private equity, and M&A). This type of headline investment figure helped sustain high venture funding for metaverse startups in 2022, even as definitions of “metaverse” varied across the industry.
S&P Global Market Intelligence (Kagan) data showed metaverse company funding in 2022 at about $4.09 billion across 65 deals in its tracked set. This was a high point for venture funding into metaverse-labeled companies before a sharp pullback, and it marked a shift toward fewer, larger rounds rather than many small experiments.
Microsoft completed its acquisition of Activision Blizzard in 2023, bringing major gaming franchises under Microsoft Gaming. This outcome mattered for metaverse startup markets because it showed large platforms were consolidating key content and communities—often reducing the room for smaller, “general-purpose metaverse” startups and pushing them toward specialized niches (tools, infrastructure, and enterprise use cases).
S&P Global Market Intelligence (Kagan) reported that tracked metaverse company funding fell to roughly $530 million in 2023, down about 87% from 2022, with deal count also declining. This shift reflected tighter capital markets, slower consumer adoption, and investors redirecting attention to other themes (especially generative AI).
S&P Global Market Intelligence (Kagan) described 2023’s metaverse funding value as the lowest annual total since at least 2018 in its dataset. This is an important “closing” marker for the 2017–2023 story: the funding cycle moved from early experimentation, to 2021–2022 hype and large rounds, and then into a steep correction in 2023.
Venture funding for metaverse startups (2017–2023)