SoftBank bets on Asian metaverse platform selling digital Gucci and Dior

Naver Corp.’s Zepeto, which users access through a mobile app, is Asia’s most active metaverse platform with around 2 million daily active users. People scan a photo and can create digital likenesses of themselves, then find themselves in virtual worlds. Users can chat with each other and browse virtual spaces such as a haunted house, a classroom, or a garden wedding.

Zepeto, even by emerging Metaverse standards, is a niche. Roblox Corp., which runs one of the most popular metaverse platforms, said it had more than 47 million daily active users in the third quarter.

But about 70% of Zepeto users are women between the ages of 13 and 24, said Naver, a rarity in the metaverse landscape largely dominated by older male gamers.

SoftBank Vision Fund 2 investment values ​​Zepeto, launched in 2018, at over $ 1 billion. A group of South Korean investors, including HYBE Co., which manages K-pop boy group BTS, is separately paying around $ 41 million at the same valuation. The Series B fundraiser led by SoftBank is expected to be announced later Tuesday, according to the companies involved.

Zepeto’s appeal to young women, primarily across Asia, shows the potential of the metaverse to reach a diverse audience and create a new online marketplace. Some 1.5 billion virtual fashion items are sold on Zepeto, most of which are made by independent designers and typically cost a few dollars or less each.

Major fashion brands including Gucci, Dior and Ralph Lauren have also unveiled virtual clothing collections on Zepeto. Singer and actress Selena Gomez and popular K-pop girl group Blackpink have sold exclusive items and held fan meetings within the platform.

“We are probably the biggest virtual fashion market in the world,” said Rudy Lee, chief strategy officer at Naver Z Corp., a subsidiary of the South Korean internet giant that operates Zepeto.

Global tech companies are investing billions of dollars and deploying new products tailored to this emerging digital world. Facebook owner Meta Platforms Inc. renamed itself last month after the virtual domain, pledging to spend billions of dollars on its metaverse division focused on augmented and virtual reality technologies. Microsoft Corp. announced new software tools to enable more interactive virtual meetings in the metaverse. Nvidia Corp. and Advanced Micro Devices Inc., which provide essential chips for the Metaverse infrastructure, have seen their stock prices skyrocket.

This is the start of the metaverse, with offerings still fragmented and a user base made up largely of trend-savvy gamers. There is no consensus yet on what the metaverse will look like, according to industry analysts.

SoftBank’s investment in Zepeto marks his second metaverse-related bet in recent weeks, following a $ 93 million investment round he led for The Sandbox, a Hong Kong-based online gaming platform. and focused on blockchain technology.

“We believe the metaverse has the potential to be the next evolution of the Internet,” said Greg Moon, managing partner of SoftBank Investment Advisers, the London-based branch of the technology group that manages SoftBank’s Vision Fund 2.

Zepeto’s largest user bases are in China and Indonesia, Naver said, although it has large audiences in the United States, Brazil, Japan and its home country. The platform could grow based on this global Gen Z user base, its avatar technologies, and plans to increase investment in new areas such as games, Moon said. .

For now, Zepeto’s designer economy is focused on fashion. ZDE, a 28-year-old Seoul-based designer, earns around $ 8,500 a month selling digital clothing on average on Zepeto, having sold more than 1.4 million virtual items in about a year and a half.

“I first started Zepeto as a side business, but the business has been so good that I will soon be quitting my job to devote my full attention to designing items for Zepeto,” ZDE said.

Zepeto fans say the metaverse platform provides opportunities to meet people all over the world and do things they think aren’t easy in the real world, like taking selfies with a star. Favorite K-pop or buy a Gucci shirt.

“I will never be able to wear the things Blackpink wears in real life. But my avatar Zepeto, she can. The dress part, I really like that,” said Monica Louise, 28, who directs videos and movies. social media content featuring his Zepeto avatars. She said she first joined Zepeto while living in the Philippines, before recently moving to Canada. .

Zepeto-related content has also gained traction on social media platforms. On the video-sharing app TikTok, a hashtag for Zepeto has racked up over 11 billion views, while the hashtag #zepeto has around 3.3 million Instagram posts.

To become a bigger metaverse platform, Zepeto would need to create a more complex ecosystem where a wider range of creator-developed content reaches users, as more established players such as Roblox have done, Kim Joong said. -han, a Seoul-based global technology platform companies analyst at Samsung Securities Co.

“Zepeto now functions more as a social networking service using the concept of the metaverse,” Kim said, noting that Zepeto is still fairly new and in development.

Mr. Lee, chief strategy officer for Naver Z, said Zepeto recently launched a new tool for creators to develop games and other interactive applications for the platform. The company is also setting up a creators’ fund to encourage such efforts. A desktop version of Zepeto is in the works for launch next year, he said.

A fully realized metaverse, with users able to move across different business platforms or more immersive digital worlds with augmented or virtual reality, remains for years, according to tech experts.

“We don’t think the metaverse will take shape until 2025 at the earliest,” said Yexi Liao, a Taiwan-based analyst who tracks technology platforms and VR and AR technologies at International Data Corp., a technology researcher. .

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