Although Zuckerberg & Co. Spending billions of dollars each fiscal quarter on virtual reality technology, the wider VR startup ecosystem has struggled since the highs of 2016, when investors dumped money into the industry, expecting only Oculus returns to slow most of their investments. see it fade away.
This makes it quite remarkable news when a major institutional investor these days takes a gamble on a VR startup – even just a seed round. Earlier this week, I sat down with the folks at the 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 Angul Fund, and Balaji Srinivasan.
Gym Class is what they call a VR pure play – the experience depends on the hardware and the mechanics only make sense in VR. So in theory, a company bet is not just a bet on the team’s net worth, but the short-term viability of the space they operate in. It’s a safer bet in a world where Meta and Apple are investing heavily in the sector, but still risky given the uncertainty about the timing of further headset adoption.
Even among other VR titles, the game itself is early – Gym Class isn’t even available on 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 promise but still have a lot of development ahead of them before they’re ready for prime time. So far, Gym Class has gotten quite a bit of attention before it even made it to the official Quest store, thanks in large part to TikTok’s share of gameplay footage.
Gym Class product leader Paul Katsen tells BestFitnessBands that the startup sees the experience more as a social hub than a simple game, a game that allows people to jump into a virtual space and bond with the sport and culture surrounding basketball. Gym Class is currently heavily focused on basketball, the company says, and has no near-term plans to build out a wider range of sports experiences.
The upcoming official launch of the Quest Store is a big moment for the company, but it confirms how crucial Meta’s platform remains for all virtual reality developers. Late last month, Meta caused a stir by announcing a price increase on their long-available Quest 2 headset, citing the need to recoup the investment in the low-margin device.
“When you become dependent on these platforms for distribution, you don’t build your own distribution platform,” Katsen says, “when we see the prices go up by $100, yeah that’s a shame, but still — the trajectory it grows — it sells better than consoles.”