The Venture Reality Fund (VR Fund) has been around for over five years. In that time, virtual reality (VR), which inspired the firm’s name, has only grown in terms of popularity, technological development, and resulting investment opportunities. VR Fund’s success is proof of all three.
Facebook Helps Turn the Page
For example, the VR Fund’s portfolio of start-ups in which the Bay Area firm has invested comprises 33 entities. Others still have been kept off the website due to the association between the two still being kept private, according to Co-Founder and General Partner Tipatat Chennavasin. The portfolio includes the likes of Beat Games, which has since been acquired by Facebook, the tech giant that has in turn separately gained traction in the sector with its Oculus brand.
Beat Games is just one VR Fund success story, though. There are others, such as the Helsinki-based Varjo. Talking to 6GWorldTM, Varjo CEO Urho Konttori attributed some of the sector’s momentum to Oculus, but he said spatial computing in general, which is an umbrella term for the likes of VR, augmented reality (AR), and extended reality (XR), is set for a more gradual break-out too.
“The transformation of spatial computing really started on a new gear roughly at the time Facebook launched the Oculus Quest, and of course got further accelerated by the Oculus Quest 2,” he said. “[We’re] seeing the developments happening overall in the [AR] industry, where I would say things are not nearly on the same kind of stage as it is for VR. [In VR], actual business is taking place and the money starts to be pretty good and so forth, [but] the AR side[…] has been more laying down the groundwork for the technology.”
“We need three to five years [before] we’ll be making a transformation on how people actually communicate, how they interact socially as well as overall in the world. “
Orange Joins the Party
At the opposite end of the spectrum, instead of being invested in, French telecom company Orange became the first European company to invest in the VR Fund II (its second fund, which started at the end of 2020). Chennavasin said he hopes it’s the first of many European companies and, independent of Konttori, also suggested Oculus has been a catalyst across the Atlantic Ocean.
“It’s a combination of [increased interest on the part of European companies and] the maturity of the ecosystem, because again we’re focused on VR and AR and AI. It’s kind of what we think about as the future of computing,” Chennavasin said. “For Fund I it was something where most European companies weren’t as interested in something they felt was that far away, but now I think they’re realising, because of things like 5G and the success of the Oculus Quest and all these other things, this future of computing is happening much faster. I think Europe is going to be much more on board hopefully for Fund II and just in general in being involved in the ecosystem.”
Kontorri similarly saw the Orange news as part of a trend that’s been developing for some time.
“I do think I see a lot of traction within the mobile-devices market, including 5G operators like Orange wanting to have a foothold in this market,” he said. “I do think VR Fund is an excellent channel for accessing this kind of technology start-up.”
When Virtual Looks Real
For its part, Varjo is grateful for the foothold it’s gained in the Silicon Valley area due to its relationship with the VR Fund.
“We founded [Varjo] in 2016 and started with a seed investment of roughly $1 million at that stage. VR Fund joined us in the A round when we were basically looking at the level [to] have proven some of our core technologies, that we are able to do human-eye resolution, video see-through-based mixed reality. The A round was all about ‘we have technology;’ Now we actually have to make a product out of it. That was the time VR Fund joined our common path,” Kontorri explained.
The human-eye resolution element is key, with Varjo having delivered the world’s first photorealistic mixed-reality experience. Varjo’s two flagship products are its XR-3 and VR-3 headsets, with potential applications in training & simulation, design & engineering, research, and medicine.
“When we started the company, we had developed some crude prototypes on top of more ordinary VR headsets with Oculus Rift and then utilising on top of that some very vast cameras,” Kontorri said. “This showed that video see-through-based mixed reality allows you to have the perception that things feel and look completely real in front of you, but it’s more of a curiosity if you don’t take it to the sufficient level in quality; both for the display, which is why we started doing human-eye resolution displays, and then secondly for the video see-through signal itself. If you see a video-game-quality view of the world around you, it never feels like the real thing.”
And getting the virtual to feel more real is the sector’s constant goal. For example, Chennavasin said he sees spatial computing as bringing the interface of the digital world closer to the physical world, even if people communicating with one another are on different sides of it.
“3G enabled photo sharing. 4G enabled video sharing. If you think how that ties in with the smartphone revolution and the first major use case of social and video media on smartphones, what’s the next step after that? Holographic communication,” he said. “I think the idea of interacting with virtual, digital 3D worlds, all of that is going to be necessary. How can we do that in a way with a device that’s comfortable to wear, not like the big devices we have today?
“I think a lot of that’s going to be what we need high-speed, low-latency edge computing for and we need 5G and 6G to enable that.”
VR Set to Increase Productivity
Chennavasin argued the introduction of the keyboard and mouse helped to usher in a new era of democratisation of technology, where almost every home had a computer. Smartphones represent one more step, and, according to Chennavasin, spatial computing is the next major platform shift after that. Ultimately, Chennavasin called it a huge opportunity for everyone from an economic standpoint, one which the VR Fund has embraced early.
“Really it wasn’t until the smartphone revolution where every single member of a family can now have a computer,” he said. “What that really meant was computers became not a productivity device; It became a communication device, but, really, what we see is with VR/ AR this idea of having a computer interface that’s even more accessible than a touchscreen but powerful enough that it’s as productive as a keyboard and mouse. I think that’s going to be the killer combination that says, ‘how can we unlock productivity for everyone?’”
“I think what’s really interesting when we compare the old economy to the digital economy, the digital economy is not limited by a scarcity of resources or material. So[…] everyone can potentially participate and benefit from it in a useful way.”
Feature image courtesy of Alfa Photo (via Shutterstock).