South Korea’s Naver Z launches $100M fund for metaverse creators

South Korean internet conglomerate Naver Group continues to ride the hottest internet trends targeting young users. It has been the name behind messaging giant Line and popular selfie app Snow. And now, it’s charging into the metaverse, the red hot concept that makes Roblox, Epic Games and other gaming giants the talk of the town.

Naver Z, a Naver subsidiary that runs the 3D-avatar app Zepeto, is launching a $100 million fund in the upcoming months to promote its newly launched plugin powered by Unity, the platform that enables creators to develop 2D and 3D content for mobile phones, PCs or virtual reality devices.

Four-year-old Zepeto provides an amalgam of entertainment, gaming, and social networking experiences. It lets users render their selfies in 3D avatars, design digital spaces and interact with others. As of January, the app has 20 million monthly active users, up from 10 million in May 2020, Rudy Lee, Naver Z’s chief strategy officer, told TechCrunch.

The app’s registered users have nearly doubled to 290 million since a year and a half ago, and the average session length in what it calls a “World”, a user-generated virtual space that’s the rough equivalent of Roblox’s “Experience”, is 30 minutes.

Zepeto has users around the world, but particularly among female teenagers and early twenty-somethings in South Korea and China. Given its target demographics, it’s no surprise designer brands like Gucci and Ralph Lauren, as well as celebrities Blackpink and Selena Gomez, have tapped Zepeto to construct their own branded digital experiences. Designer accessories that are prohibitively expensive for most people in real life are suddenly more affordable in Zepeto’s virtual world.

The $100 million creator fund will allow Zepeto to diversify the range of “metaverse” experiences it supports. Naver Z plans to take equity stakes in promising studios using the Unity plugin to generate 3D experiences on Zepeto, while it will also dole out cash rewards for high-potential Zepeto creators using the plugin, judging on performance metrics like plays, visits, and active users.

The initiative arrives on the back of Naver Z’s hefty $190 million Series B fundraising round last year, which was led by SoftBank Vision Fund II and joined by Mirae Asset, major K-pop talent agencies, and other investment firms.

Like most virtual entertainment platforms, Zepeto relies on item sales to monetize. It has sold 2 billion pieces of items since its launch in 2018; the count was 600 million in mid-2020. Last year, its top-selling creator generated gross revenue of $500,000.