CORRECTION: December 18, 2019. Since the publication of this article, it has become known to the author that the “XR Basefund” has never existed as a venture capital fund, nor was any legal entity or company ever established for serving this purpose. We apologize for the error.
A new early stage VR/AR startup fund has announced that it will launch in Europe by the end of the year. Coined the XR Basefund, the €50 million-sized fund is a co-venture between Ariadne Capital, 2SQRS, and the VRBASE. The XR in the name stands for “extended reality” which has become an abbreviation that more and more people in the industry (including myself) are using to wrap-up the immersive spectrum of VR, AR and MR under a single breath. Debuting in December, the XR Basefund will look to invest in up to 40 startups and will concentrate on ventures based exclusively in Europe. The fundings will range from €250,000 to €1,000,000, of which up to 50 percent of the fund will be held for follow-on investments. They will specialize in gaming, 3D tools, location-based concepts like VR arcades, user input, reality capture, and content generation across the board. “Emphasis will be on software and not hardware, supporting tools that will accelerate the ease of use for content creation, distribution and scalability and understand the importance of the connection between AI, blockchain, [internet of things], and XR,” said Pascal Verloop, a partner at the XR Basefund and director at 2SQRS Lab.
The timing is right
In November last year, I covered how Europe’s VR community had doubled in size compared to the previous year, growing up to roughly 40,000 meetup members across the region. While that grassroots growth spurt has begun to taper off, the spotlight has shifted to the rapid rise of European VR/AR startups in its wake. The figure jumped from 300 companies in February to 487 in August, as reported by The Venture Reality Fund and LucidWeb just six months later. That’s exactly the kind of step-by-step progression you should expect to see as a lively grassroots community converts enthusiasts into evangelists that want to get busy creating commercial realities out of the exciting emerging technologies that are being shared at the hundreds of events regularly run across Europe. It’s a funnel that is taking shape organically. “When it comes to gaming (Space Pirate trainers, Arizona Sunshine, Elite Dangerous, Landfall, Serious Sam VR), User Input (StarVR, Manus VR, Cyberith Virtualizer, Tobii), Content studio (Innerspace, REWIND, StarBreeze) and 3Dtools (Improbable, Unity, Crytek), Europe’s contribution to advancing VR/AD is absolutely undeniable.” Juan Bossicard, co-founder of EUVR, a nonprofit organization dedicated to maturing the VR industry in Europe, told me. “Having a dedicated European VR/AR fund will help accelerate the rate of innovation in the field and will enable Europe to capitalize further on some of its core strengths: creativity, culture and design.” Now during the past couple of years, a series of accelerators and incubators have popped up in hubs like Amsterdam, London, Berlin, Eindhoven, Paris and Madrid. That helped to fill the need for assisting early-stage teams get the pre-seed investments and support to prepare their concepts for the next stage, but what was missing were local VC firms that were specialized, targeted, or even interested in XR-oriented startups. For that, the more mature startups would have to reach out to VCs based all the way in the US or Asia.
The geographical link
That missing link or geographic dependency is what changes with the news that this new regional fund is entering the scene and is dedicated solely to European-based startups and talent. It will help to fill the sore capital gap in the European immersive landscape and, ideally, also serve as a trigger that will make the space more attractive or comfortable for other local and regional funds to step in and participate. “Our objective is to position XR Basefund as the most knowledgeable VC in the European XR ecosystem.” Daniel Doornink, Partner at the XR Basefund and CEO at VRBASE, told me. “We help grow our ventures by contributing, besides capital, also a high-level network and industry knowledge. The fund will use its extensive network to connect startups to their partners and give our ventures significant additional exposure.” More details about the fund will be revealed later this month on the second day of the VR Days conference in Amsterdam, where VCs like Shintaro Yamakami at Colopl, Masaru “Nogi” Ohnogi at Gumi, Marco DeMiroz at the VR Fund, Dave Haynes at Seedcamp, Jon Goldman at Greycroft Ventures, and Tom Emrich at Super Ventures will all be sitting in as panelists for an investor-pitching event called the BASE Investor-Event. XR Basefund will also have its headquarters in Amsterdam, a city that is steadily making a name for itself as one of the leading XR hubs of Europe.
Amir-Esmaeil Bozorgzadeh is the founder at Virtuleap, a sandbox for creative developers to showcase their VR concepts to the world, which recently ran the world’s biggest WebVR Hackathon.