The firm, which now has over $4 billion in assets under management, invests across all stagesRead more...
The fund is also changing its name to GFR Fund to avoid confusion over its areas of investment
Virtual, augmented and mixed reality are some of the most exciting spaces in tech right now, offering some really interesting advances and experiences, though perhaps without some of the overhype brought on by artificial intelligence and machine learning. Investors are taking notice, with over $2.5 billion invested in 2017, and over $1 billion of that coming in Q4 of last year alone.
One investor with a total focus on this space is GREE VR Capital and it has made two major announcements regarding its first fund and its future.
GVR Fund, which was established in April of 2016, closed with $18.3 million, it was revealed on Thursday. Since its inception, it has already made investments in 17 startup companies in the virtual, augmented and mixed reality spaces, including VRChat, Sliver.tv and Littlstar.
The fund is led by Gree VR Capital, a division of Japanese mobile gaming company GREE, and it helps their portfolio companies gain traction in Asian markets. With the first fund already fully invested, the firm is currently preparing its second fund, through which it plans to invest in four to five AR startups in the next six months.
One thing will be different going forward, though: its name, which has been changed to GFR Fund to avoid confusion over which spaces the fund does its investing.
"Some people in the industry thought that GVR Fund only invested in VR, not AR/MR because of its name. We'd like to avoid this kind of confusion and misunderstanding so we changed it to reflect our commitment to technology innovation and deep R&D, often referred to as 'frontier' technologies," Teppei Tsutsui, CEO of GFR Fund, explained to VatorNews.
GREE has been interested emerging technology for years, and now spaces like AR and VR offer the company a chance to continue to be on the cutting edge, he told me.
"In the late 2000s, GREE saw a big opportunity in a platform shift from PC to mobile and went all-in for mobile. The strategy paid off well and led the company to IPO. We see the same opportunity in VR/AR/MR and believe that it is going to be the next big platform."
Going forward, the fund is will be putting its focus on five sectors: mobile AR platforms, AR Cloud, consumer AR applications, and enterprise AR, including AR glasses.
GFR Fund typically invests in seed and pre-Series A rounds, though it does also so some Series A investing, with initial checks of $300,000 to $500,000. It sets aside 30 to 40 percent of fund for follow on, but doesn't invest more than $1 million per company.
Despite usually investing early in a company's lifespan, GFR still looks for startups that have some traction.
"We look closely at the founders' background, their commitment and ability to execute fast. Also a product/demo that has a sign of early user traction," Tsutsui said.
"There isn't one single metric that we believe is more important than others,but some of the traction we look at includes the number of downloads and active users, user engagement and retention for consumer companies; the number of customers, potential revenues per customer, acquisition cost and LTV. Quantity is important, but we also believe customer satisfaction is important, so we tend to do a lot of customer reference checks."
The Fund invested in 11 companies in 2016 and six in 2017, excluding the follow-on. It's targeting between 20 and 25 portfolio companies out of the next GFR Fund, so it expects to invest in five to six companies during the 2018 calendar year.
"One thing is unique about our fund is that our LPs are all strategic investors from Asia. Although we're a financially driven investor, we're able to leverage our LP's resources, expertise and network to support our portfolio companies," said Tsutsui.
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GREE is a global mobile social gaming company at the forefront of mobile technology. GREE is focused on building the leading mobile social gaming ecosystem for users and developers worldwide, with an emphasis on creating and supporting unique free-to-play game content. The new GREE Platform will be available in Q2 2012. Following the acquisition of OpenFeint Inc. in April 2011, GREE's robust network now reaches over 190 million players and offers over 7,500 game applications to users around the world. With offices in Tokyo (head office), San Francisco, London, Beijing, Sao Paulo, and Dubai, GREE will continue to expand aggressively worldwide.