Rec Room and Blippar land significant funding boosts

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Rec Room and Blippar are strong examples of the investment opportunities that exist in immersive technology in 2021

Quick read

➨ Virtual and augmented reality are high on the agenda of investors eager to see how digital transformation will play out in the consumer and enterprise markets
➨ US-based Rec Room Inc raised $100 million in financing from Sequoia Capital, Index Ventures, and Madrona Venture Group, a round that values the company at $1.25 billion
➨ In Scotland, Blippar, an augmented reality technology company, this week closed a $5 million funding round

The story

The Rec Room and Blippar funding rounds announced this week reveal that virtual and augmented reality are high on the agenda of investors eager to see how digital transformation will play out in the consumer and enterprise markets.

First up is Rec Room, the cross-platform social experience built on user-generated content that is doing a fine job of monetising virtual multiplayer games and merchandise.

Yesterday, US-based Rec Room Inc raised $100 million in financing from Sequoia Capital, Index Ventures, and Madrona Venture Group, a round that values the company at $1.25 billion.

Although existing investors, these venture capital firms are showing significant belief in Rec Room, which started out as virtual reality-only experience but is now present on PC, video game consoles and mobile devices.

TechCrunch says they are among a cohort of investors who missed out on Roblox’s IPO and don’t want to make the same mistake with other social gaming providers.

For its part, Rec Room is an excellent investment opportunity, surpassing 15 million regular users and achieving 566% year-over-year revenue growth. Previous funding rounds raised less than $50 million combined.

Rec Room and Blippar land significant funding boosts - Rec Room 2
started out as virtual reality-only experience but is now present on PC, video game consoles and mobile devices

‘Leaner, more focused and better than ever before’

In Scotland, Blippar, an augmented reality technology company, this week closed a $5 million funding round.

Launched in 2011, Blippar previously struggled to establish itself in the consumer augmented reality market and had to seek new investors.

Today, Blippar is focused on augmented reality content creation for the web in sectors such as live events, retail, fast-moving consumer goods, automotive, healthcare and education.

Its augmented reality creation and publishing platform, Blippbuilder, enables users to create and publish their own experiences. It also operates its own augmented reality studio.

Rec Room and Blippar land significant funding boosts - Blippar
Blippar clients include OnePlus, Kellogg’s and Dr Pepper

The pre-Series A round was co-led by Chroma Ventures, the investment arm of Paddy Burns and Chris van der Kuyl’s gaming company, 4J Studios, and West Coast Capital, the private equity arm of Scottish entrepreneur Sir Tom Hunter.

Canadian entrepreneur Anthony Lacavera also contributed to the round through his Globalive Capital investment firm. All are new investors in Blippar, demonstrating both the company’s potential and that of business-to-consumer augmented reality after a well-executed turnaround of its fortunes.

As Hunter explains: “Blippar has demonstrated strong progress with the turnaround plan put in place by Faisal [Galaria, chief executive officer of Blippar] and the team, and the business is now well placed to maximise the opportunities presented by the growing AR ecosystem, hence we are delighted to invest.”

Blippar says the funding will be used to further develop its technology and accelerate its growth in key markets including the US, Europe and Asia.

Galaria says: “We are very excited to have attracted investors of this calibre to Blippar. Not only is this a solid vote of confidence in Blippar’s technology from some of the most highly regarded industry veterans and business minds, but it also demonstrates sustained validation of the UK tech sector post-Brexit.”

“2020 was a transformative year for Blippar with a 200% increase in revenue quarter on quarter, continued strengthening of the senior leadership team, and delivery of cutting-edge AR campaigns for major global brands including OnePlus, Kellogg’s and Dr Pepper. We have leveraged our 10 years of investment, provenance, and technology leadership in the AR space to come back leaner, more focused and better than ever before.”

Van der Kuyl, who has also joined the Blippar board as a director, adds: “The immersive nature of AR makes it one of the most important use cases for the gaming industry. Blippar’s AR technology is by far the most advanced and innovative that I’ve seen in years and there is huge potential for AR to power the ultimate gaming experience of the future. We look forward to being part of the Blippar journey.”

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Images: Rec Room and Blippar

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