Despite Zuckerberg & Co. spending billions of dollars on virtual reality tech every fiscal quarter, the wider VR startup ecosystem has been having a tough few years coming down from the highs of 2016, when investors dumped money into the sector expecting Oculus-sized returns only to see most of their investments slowly wilt away.
This makes it fairly notable news whenever a big institutional investor makes a bet in a VR startup these days -- even just a seed round. Earlier this week I sat down with the folks at basketball virtual reality app Gym Class, which just closed an $8 million seed round from Andreessen Horowitz. Other backers include Founders, Inc., Todd and Rahul’s Angel Fund and Balaji Srinivasan.
Gym Class is what they call a VR pure-play -- the experience relies on the hardware, and the mechanics only make sense in VR. So, in theory, a bet in the company isn't just a bet on the ability of the team, but the near-term viability of the space they're operating in. It's a safer bet in a world where Meta and Apple are investing heavily in the sector, but still risky given uncertainty around the timing of further headset adoption.
Even among other VR titles, the game itself is early -- Gym Class isn't even available in Meta's Quest Store yet. To date, the nearly 1 million downloads of the free app have taken place on Meta's App Lab storefront, a hub for games that show early promise but may have a good deal of development ahead of them before they're ready for prime time. So far, Gym Class has gotten quite a bit of attention before even landing on the official Quest store largely due to TikTok shares of gameplay footage.
Image Credits: Gym Class
Gym Class's product head Paul Katsen tells TechCrunch that the startup is thinking about the experience as more of a social hub than a simple game, one that allows people to hop into a virtual space and bond over the sport and culture around basketball. Gym Class is tightly focused on basketball for the time being, the company says, and doesn't have any near-term plans to build out a wider offering of sports experiences.
The company's upcoming official Quest Store launch is a big moment for the company, but cements just how critical Meta's platform remains for any and all virtual reality developers. Late last month, Meta made a stir by announcing a price increase of their long-available Quest 2 headset, citing a need to recoup investment in the low-margin device.
"If you become reliant on these platforms for distribution, you don’t build your own distribution platform," Katsen says, "When we see prices are going up by $100, yeah that’s a bummer, but still -- the trajectory at which it's growing -- it’s outselling consoles."