Investor Closes On $3M Decentraland Parcel, Placing It Among Tops For Metaverse Deals
A metaverse investment firm has closed on its largest purchase to date in Decentraland, one of about 10 major community platforms within the metaverse. Valued at north of $3M, the deal is also the top reported Decentraland acquisition since the platform opened up to the public in 2017.
Canadian technology firm TerraZero, which was founded last year to capitalize on burgeoning demand for the virtual community concept, bought a 185-parcel site with plans to develop an entertainment-anchored mixed-use complex.
“In the real world, we can create an arena for 20,000 people to watch a concert,” TerraZero CEO Dan Reitzik told Bisnow. “In the metaverse, 20 million people can attend that concert.”
Untraditional valuations and untraditional sales processes have made it difficult to track the top-valued metaverse land deals, but reports indicate the prior top deal for the Decentraland platform was a $2.4M purchase by The Metaverse Group, a new subsidiary of crypto firm Tokens.com.
TerraZero purchased its new Decentraland parcel from Carl Fravel, one of the original advisers for the platform. As part of the deal — which includes a swath of “strategic virtual real estate” that Fravel has owned since the platform was created — the tech exec will join TerraZero as a strategic adviser.
TerraZero was behind the first metaverse mortgage, last month offering financing for a venture capital firm in a deal totaling $30K. Through the firm’s mortgage platform, TerraZero acquires parcels and establishes monthly loan payments for the client, during which the borrower can occupy and operate its parcel, but the non-fungible token is held by TerraZero until it is paid back. The NFT is then transferred to the client, similar to a deed.
Each digital parcel runs about $15K in Decentraland. That is up from $20 in 2017.
A TerraZero-led team of about 40 engineers, programmers and modelers will develop the mixed-use complex, to be delivered in phases over the next six months. Reitzik envisions the site to ultimately include concert and entertainment venues, a shopping mall, nightclubs and casinos.
“It will be a massive entertainment district, not unlike the ones you see in large cities in the real world,” Reitzik said. “My dream is to bring events and live music to the metaverse, without the real-world constraints of how many people can attend.”
Immersive entertainment venues are generating a lot of attention from metaverse investors, Reitzik said, while retail is also quickly gaining traction with the entrance of big-name brands like Nike and Adidas.
“Pretty soon, any retailer who has an e-commerce platform will expand into the metaverse. It’s the next natural iteration of retail,” Reitzik said.
TerraZero is also prepping to launch a metaverse data analytics platform next month that will help clients identify prime locations for their brand.
“We are seeing more and more interest from real estate companies looking to get in on the metaverse,” Reitzik said, noting that his firm is in talks with two of the top CRE brokerages regarding investment strategies.
Not only do we own valuable virtual real estate, but we also generate recurring revenue, similar to landlords in the physical world and to online advertising platforms such as large search engines and social media networks,” he said.
In another move from The Metaverse Group, the company said Wednesday it inked virtual land lease agreements with four companies: Groundbreak Ventures, Renno & Co., Sophia Technologies and Thrivo Technologies Inc. The leases are in Decentraland and Somnium Space.
The company’s executive chairman, Andrew Kiguel, also the CEO of Tokens.com, said the metaverse deals have been a solid revenue source, not unlike “landlords in the physical world.”
“These partnerships establish Metaverse Group as one of the first virtual landlords in the world to successfully lease out its Metaverse real estate,” Kiguel said in a release.