AltspaceVR, a startup that pioneered the concept of “social” VR, announced Thursday that it is shutting down on Aug. 3, at 7 p.m. PT because it was unable to lock in a new round of funding.
AltspaceVR, which counted Comcast Ventures among its backers, spread the word on its blog this morning and last night via an email to registered users.
“It is with a tremendously heavy heart that we let you all know that we are closing down AltspaceVR on August 3rd…,” the company said in this blog post. “The company has run into unforeseen financial difficulty and we can’t afford to keep the virtual lights on anymore. This is surprising, disappointing, and frustrating for every one of us who have put our passion and our hopes into AltspaceVR. We know it will probably feel similarly for you.”
AltspaceVR noted that a group of investors offered funding in 2015, but that its next round fell through. It raised a $10.3 million Series A round in 2015 that included participation from Comcast Ventures, Tencent, Dolby Family Ventures and Promus Ventures, among others. AltspaceVR, founded in 2013, has raised $15.7 million, according to CrunchBase.
“Some combination of this deal falling through and the general slowness of VR market growth made most of our investors reluctant to fund us further. We’ve been out fundraising but have run out of time and money,” the company explained.
AltspaceVR said it’s still working on its next steps and what will happen to the company. “We’d love to see this technology, if not the company, live on in some way, and we’re working on that.”
AltspaceVR’s decision to shut down also comes as other, much larger companies in the sector, including Facebook-owned Oculus and Google Daydream, developed and launched social VR platforms of their own.
The company said about 35,000 people use AltspaceVR’s platform every month, and that it typically sees around 1,000 attendees for some of its bigger events. The average user spending 35 minutes a day in AltspaceVR, the company said.
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AltspaceVR CEO and co-founder Eric Romo keynoted last fall’s VR 20/20 event, part of NewBay Media’s NYC Television & Video Week, offering a view on how he expects the market to evolve and change in the next three-plus years.
He acknowledged that the initial way consumers accessed VR using headsets that had to be paired to smartphones or connected to gaming consoles or high-powered PCs was a difficult model for consumers. Romo predicted that in 2020 stand-alone platforms “optimized for VR” will become dominant and outsell today’s approaches.
Both Oculus and Google are developing the kind of stand-alone VR headsets that Romo said will help to push the market forward in a bigger way.
AltspaceVR will hold a “final farewell party” on Aug. 3 between 5 p.m. to 7 p.m. so users can reminisce and say good-bye to the platform.