Varjo raises $54 Million series C funding for next stage of expansion

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Varjo has raised $54 million in series C funding and attracted several new partners as the virtual reality and mixed reality company moves onto the next stage of its development

Quick read

➨ Varjo has closed a $54 million series C funding round, taking the XR hardware and software company’s total raised since its inception to $100 million
➨ The funding comes hot on the heels of a MegaGrant award from Epic Games, which will be used to support the XR-1 Developer Edition headset as part of the mainline offering of Unreal Engine
➨ Varo will remain focused on enterprise, but wants to begin addressing a much broader audience

The story

Varjo has closed a $54 million series C funding round, taking the XR hardware and software company’s total raised since its inception to $100 million.

That’s high praise from new investors Tesi, NordicNinja, and Swisscanto Invest by Zürcher Kantonalbank. And follow-on investment participation from existing investors, including Lifeline Ventures, Atomico, EQT Ventures, and Volvo Cars Tech Fund, shows continued commitment to an enterprise-focused company that’s quickly becoming a leading name in high-tech VR and MR.

The funding comes hot on the heels of a MegaGrant award from Epic Games, which will be used to support the XR-1 Developer Edition headset as part of the mainline offering of Unreal Engine.

Keith Bonnici, investment director at new investor Tesi, said in a statement that “Varjo has established itself as a proven industry leader, as evidenced by its ability to continually push the boundaries of virtual and mixed reality and support the most demanding enterprise applications across industries”.

“With their history of breathtaking product innovation, a strong and experienced team and increasing market demand, we are excited to be on board on their journey of revolutionising computing for all.” 

Petteri Koponen, founding partner at Lifeline Ventures and Varjo’s chairman of the board, said: “We were early seed investors in Varjo and believed in their vision for how immersive computing could transform the way professionals work from the very beginning. In less than four years, Varjo has delivered both industry-leading hardware and software to the market.”

“We are thrilled to be participating in this latest funding round as the company continues to scale and deliver an ecosystem capable of bringing enterprise XR adoption mainstream.”

Timo Toikkanen is the new CEO of Varjo

With the new funding also comes news that president and chief operating officer Timo Toikkanen has taken over as chief executive officer of Varjo. Co-founder and the previous chief, Niko Eiden, will focus on technological innovation as chief experience officer and a board member.

Given the impact the Covid-19 pandemic is currently having on work and travel, Toikkanen told VRWorldTech that this funding round was unlike any he had ever worked on.

He said: “It’s a very peculiar time to be on a funding round. We were not able to travel or meet investors, so it was a one-of-a-kind experience.”

Crucially, the restrictions meant that Varjo couldn’t demonstrate its technology, which counts human eye-resolution visuals, highly accurate eye tracking and low latency as key differentiators, all of which need to be seen to be believed.

All of these strengths are “really hard to explain over the phone”, Toikkanen continued, “so we had to be innovative in how we demonstrated to investors” who, as investment experts rather than XR or VR experts, would have had limited understanding of the technology.

Those innovative demonstrations clearly did the trick, because Varjo now has its target $54 million in funding and several new partners with which to move on to the next stage of its development.

Varjo’s achievements over the past year have indicated as much. It has expanded its global operations and reseller network to more than 40 countries in North America, Europe, the Middle East and Asia Pacific, with the launch of sales and direct shipping to key markets including Singapore, Israel, South Korea, Australia and New Zealand.

The company has also achieved strong quarter-over-quarter customer growth with Boeing Starliner, Siemens, Kia and Lockheed Martin all coming onboard.

With Volvo Cars, Boeing, Audi and Siemens using its XR-1 Developer Edition, VR-2 and VR-2 Pro headsets for immersive astronaut and pilot training, designing cars, streamlining product development, and much more besides, Varjo is now “well funded for years to come”, Toikkanen said, and the company can now turn its attention to new customers and markets. Varo will remain focused on enterprise, but wants to begin addressing a much broader audience.

“While we are a recognised leader, commercially, both XR as a market and Varjo as a company are very much in the beginning of the journey,” Toikkanen continued.

With the new funding in hand and new investors onboard who can lend their experience and connections, Varjo is looking to build on its existing strong Washington DC presence in the US, which is its main geographical market, and establish an office in Japan, where it has already enjoyed a lot of success.

According to Toikkanen, there is much more for Varjo still to do and plenty of potential customers that do not yet know about VR and MR and how they could apply these immersive technologies to their businesses. The new funding and investment partners put Varjo in pole position to take advantage.

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Main image: A Varjo headset being used for training and simulation

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