Although Zuckerberg & Co. spend billions of dollars on virtual reality technology each fiscal quarter, the broader VR startup ecosystem has endured a difficult few years since the peaks of 2016, when investors poured money into the sector expecting returns from Oculus only to see most of their investments are slowly disappearing.
That makes it pretty remarkable news any time a big institutional investor makes a bet in a VR startup these days—even just a seed round. Earlier this week, I sat down with the folks at the basketball virtual reality app Fitness class, which just closed an $8 million seed round from Andreessen Horowitz. Other backers include Founders, Inc., Todd and Rahul’s Angul Fund and Balaji Srinivasan.
Gym Class is what they call VR pure play — the experience relies on the hardware and the mechanics only make sense in VR. So in theory, the bet in the company is not just a bet on the ability of the team, but also the short-term viability of the space in which they work. It’s a safer bet in a world where Meta and Apple are heavily invested in the sector, but it’s still risky given the uncertainty surrounding the timing of further headset adoption.
Even among other VR titles, the game itself is early — Gym Class isn’t even available on the Meta’s Quest Store yet. To date, nearly 1 million downloads of the free app have taken place on Meta’s App Lab store, a hub for games that show early promise but may have some development time before they’re ready for prime time. So far, Gym Class has garnered quite a bit of attention before it even landed on Quest’s official store, thanks in large part to TikTok sharing footage of the game.
Gym Class product manager Paul Katsen told TechCrunch that the startup is thinking of the experience as more of a social hub than a simple game, allowing people to jump into a virtual space and get closer to the sport and culture surrounding basketball. For now, Gym Class is heavily focused on basketball, the company says, and there are no immediate plans to build a broader offering of sports experiences.
The upcoming official launch of the company’s Quest Store is a big moment for the company, but it reinforces how critical Meta’s platform remains to any and all VR developers. Late last month, Meta made a splash by announcing a price increase on its long-available Quest 2 headset, citing the need to recoup investment in the low-margin device.
“If you become dependent on these distribution platforms, you’re not building your own distribution platform,” Katsen says. “When we see prices go up $100, yes, it’s a bummer, but still — the trajectory it’s going up — it’s outselling consoles.”