Vision Fund leads $188m investment in Naver's metaverse

The company issued 28,624 new convertible redeemable preference shares – equivalent to a post-deal stake of 19.3% – for KRW7.8 million apiece, according to a filing. Vision Fund alone put in KRW175.2 billion. Other investors include Mirae Asset and several local record labels and talent agencies, such as YG Entertainment, Hybe, and JYP Entertainment.

A metaverse is an immersive digital space for a range of human activity, typically augmented by artificial reality (AR) or virtual reality (VR) technology.

The Naver Z metaverse, known as Zepeto, was launched in 2018 and is based on 3D customizable avatars. Users can buy virtual fashion items, licensed from global brands, for their avatars. Naver is working on real-time full-body recognition technology that can duplicate even the fastest movements in a virtual environment.

It emerged from Snow, a laboratory for developing new user experiences based on Naver’s mobile AR camera and accompanying photo and video messenger app. Zepeto has 200 million users, 1.5 million studio creators, and has facilitated 50 million in-metaverse transactions, according to its website.

In October and November of last year, Big Hit Entertainment – now called Hybe, best known for representing K-pop phenomenon BTS – and YG invested KRW12 billion in Naver, while JYP contributed KRW5 billion. This is part of a broader collaboration with the entertainment industry that also saw Naver invest in a subsidiary of SM Entertainment to support live and community platforms.

Revenue from Naver’s content platform, which includes Snow, webtoons, music, and live broadcasting, generated KRW460.2 billion in revenue in 2020, up 48.8% year-on-year. Naver noted that content platform revenue reached a new quarterly high in the third quarter of 2021, partly through Zepeto monetization.

Naver Z represents Vision Fund’s second metaverse deal in Asia. Last month, it led a Series B for The Sandbox, a subsidiary of Hong Kong-based non-fungible token (NFT) specialist Animoca Brands. The Sandbox – described as a digital world that hosts virtual real estate sales and intellectual property marketing – essentially serves as a place where tokenized items can be displayed and traded.

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• Topics
• North Asia
• Early-stage
• Technology
• Media
• South Korea
• Softbank
• TMT
• Naver