The head of Twitter’s AR/VR team announced today via a tweet that he is leaving the social media site after 18 months.
Twitter hasn’t always been the quickest in its product development and the AR/VR scene (which is very much in its infancy still) hasn’t seen the company make too many daring moves. While Apple, Facebook, Snap and Google have shown off AR or VR developer platforms, there’s been little movement from Twitter in the arena.
The company has been slower to approach AR content creation features like selfie masks which have been on full display in competing products from both Snapchat and Facebook. The company’s biggest foray into virtual reality during the past couple years was likely the team’s work on Live 360 video in Periscope.
This has, more generally, been a period of a lot of movement in the AR/VR space largely as a result of companies reshaping their visions for how they see product and feature developments. Last week, Facebook brought on a new director of AR who previously worked at Google.
Featured Image: Kevin Quennesson/Twitter
Today, Sundance Film Festival announced its lineup for next month, and included yet again, were the entrants for the festival’s New Frontiers program which hosts VR content, and unlikely film title made the list this year, Wolves in the Walls.
Virtual reality may not be the technology do jour in Silicon Valley as much as it was the past couple years, but there are still plenty of milestones being traversed in the cinematic VR community which continues to believe that VR’s dominance in future entertainment is a question of when not if.
Earlier this year, it was announced that Facebook’s Oculus Story Studio would be abruptly shutting down, the 50 employees on its staff would be let go and their main project, Wolves in the Walls, would be shuttered.
This was a major blow to many in the VR community who admired much of the pioneering work that the Emmy-award winning studio had built. The studio’s latest project Dear Angelica had been one of the most moving films in the medium that I’d seen, the product of a moving narrative and an artistic style that was only possible in VR.
All of this didn’t stop a core team of employees from Oculus Story Studio from continuing to pursue hopes that the project they’d already put so much work into would eventually see the light of day. With support from Oculus, the team has spent the past several months holed up in a studio in San Francisco’s Mission neighborhood getting Wolves in the Walls ready for Sundance.
The film, directed by Pete Billington, is based on a Neil Gaiman story and follows a little girl discovering what’s hiding inside the walls of her room. You can check out a peek of the film’s design here.
Oculus Story Studio has always looked to do more than create beautiful stuff, the work they have done in VR has always seemed to be ahead of the curve and particularly apt at predicting trends that would disperse across VR creation. With Dear Angelica, the team built a pipeline that allowed visuals to be designed entirely inside VR, with Wolves in the Walls the studio is taking a closer look at how VR film-making can interact with AI tech to bring characters and viewers into more close-knit relationships. They’re working with an immersive theater company to choreograph how they interact with the space a s well.
For the first time in a movie, the audience is cast as a character, and will be there to help Lucy overcome the obstacles in front of her. This is a VR fable about the nature of fear. It is also a story about family. The youngest members of our pack often see things the most clearly, but they are also the easiest to ignore. Lucy needs our help to convince her family that something is very wrong inside the house.
It’s still unclear what the future looks like for the ragtag group of incredibly talented creators at Oculus Story Studio without Oculus, but the group detailed that they’ll be sharing more soon. Wolves in the Walls premieres at Sundance later next month.
As VC brands go, Rothenberg Ventures has seen better days.
The firm built up a reputation as an up-and-coming early-stage investor a few years ago, based on bold bets on virtual reality, a flashy marketing strategy and its well-connected namesake and founder, Mike Rothenberg. Between 2012 and 2016, the San Francisco firm participated in funding rounds for more than 100 early-stage companies, commonly investing alongside top-tier VCs.
But Silicon Valley soured on Rothenberg Ventures last year, amid charges that its founder spent beyond his means, failed to pay staff and misappropriated investor funds for a side project. Lawsuits ensued, along with a name change (since changed back), an SEC investigation and a lot of unflattering profiles casting the now 33-year-old Rothenberg as a sort of modern-day Gatsby.
So it hasn’t been a good year for Mike Rothenberg. But what about the Rothenberg Ventures portfolio?
In an effort to see how firm- and investor-specific scandals might affect portfolio companies, Crunchbase News took a look at the performance of Rothenberg Ventures-backed startups. We looked at exits and up rounds, as well as closures and apparent down rounds.
Overall, the Rothenberg portfolio seems to be doing well. It’s seen multiple exits at what appear to be favorable returns, a lot of up rounds and not too many high-profile flops. It probably helps that most portfolio companies had a number of other investors. The vast majority that raised cash from Rothenberg Ventures did so as part of a larger investor syndicate, and those startups weren’t relying on the firm as a major provider of follow-on capital.
With that in mind, here’s what the portfolio looks like now.
At least 13 Rothenberg-backed companies have gone on to exit, according to Crunchbase data. Point-of-sale systems company Revel Systems sold a majority stake to private equity firm Welsh, Carson, Anderson & Stowe.
All of the exits were through acquisitions, and most of those exits involved early-stage companies selling for undisclosed amounts. Typically, Rothenberg was a non-lead investor in a syndicate for these startups. Most had raised a few million dollars prior to exit, though a few had raised larger rounds.
A couple of acquisitions involved companies that had already stopped offering their services.
Generally speaking, if an early-stage company that is not known to be in distress gets acquired, backers make money. This seems to be the pattern for most of the Rothenberg portfolio company acquisitions to date. The list includes Sweet IQ Analytics, a provider of local search tools that sold to Gannett; Payable, a provider of software for paying contractors that sold to Stripe; and Propeller, a platform for updating apps that sold to Palantir. One of the few deals with a disclosed price was a celebrity-heavy investment, Hello Giggles, a women-focused online media startup that sold to Time for $30 million in 2015. (You can view the full list of acquisitions here.)
A couple of acquisitions involved companies that had already stopped offering their services. AltspaceVR, a social VR platform closed over the summer, was snapped up by Microsoft in October. And Luxe, a valet parking app, had also shut down before it sold to Volvo in September.
So far, the firm’s big bets on virtual reality have yet to produce lucrative exits, though some have raised follow-on rounds, which we’ll look at next.
Seed investments take a long time to mature, so it’s not surprising to see the majority of viable portfolio companies still in follow-on fundraising mode.
To date, the Rothenberg portfolio has a number of companies that have gone on to raise much larger follow-on rounds, presumably at marked-up valuations. We assembled 30 of them here.
The portfolio includes some unicorns. Mike Rothenberg said there are three companies in the portfolio that have surpassed the $1 billion valuation mark, but did not name them. It seems clear looking at the firm’s list of investments that one unicorn is RobinHood, the zero-commission platform for buying stocks, which raised its last round at a $1.3 billion valuation. The firm is a non-lead investor and one of at least 28 known backers.
The biggest exits and biggest flops are probably yet to come.
It’s unclear whether SpaceX counts as one of the unicorns. Rothenberg invested in a 2012 Series D, but SpaceX already had a multi-billion dollar valuation at the time, (although its value has since multiplied). We couldn’t identify an additional potential unicorn, so probably we either missed it or it’s a company whose billion-plus private valuation hasn’t been publicly disclosed.
There were also a number of companies that raised early-stage funding from Rothenberg that have secured significantly larger follow-on rounds in the past couple of years. Some of the bigger ones are Patreon, an online platform for sponsoring artists; 8i, a VR software developer; Andela, a tool for finding African tech talent; and Rinse, a garment care service.
Most seed-stage startup efforts don’t end in success, so we’d expect that any firm operating this stage for a few years would have some flops.
Rothenberg is no exception. Crunchbase turned up a few portfolio investments that raised small sums a few years ago and have since closed, like Butter, an app for making new friends; Buttercoin, a Bitcoin startup; and Bloodhound, an app for managing leads at trade shows. There are certainly more, though putting together a full list is challenging, as many startups prefer to quietly fade away rather than officially announce their closure. Also, seed investors commonly don’t disclose all their micro-investments, particularly for stealth startups.
The firm’s most high-profile potentially troubled asset is River Studios, a virtual reality production house Rothenberg launched in 2015. The investment came under fire last year, with Wired and other publications reporting that River hadn’t been properly green-lit by investors, lost money and was behind on rent.
The current status of River Studios is unclear. Its blog hasn’t been updated since mid-2016, and there are no open positions listed on its site.
Overall, the takeaway seems to be that Rothenberg Ventures’ downturn hasn’t extended to its portfolio companies in a meaningful way.
The firm’s performance seems similar to those of other funds of a similar vintage and approach. That is, it’s largely what we would expect from a well-connected Silicon Valley angel or VC participating in large investor syndicates for hot seed and early-stage startups in hot sectors. Rothenberg was somewhat of an outlier in its heavy focus on virtual reality, a sector that continues to attract reasonable funding but has yet to produce fat exits. VR hasn’t produced any big outcomes for Rothenberg, either — yet.
Given the long-time horizons that seed-stage startups require to mature, however, it’s still early innings for the bulk of the portfolio. The biggest exits and biggest flops are probably yet to come.
Featured Image: iStockPhoto / honglouwawa