New Recommendation: Virtuix
Editor’s Note: This is a preview of our premium research service, Startup Investor.
Dear Startup Investor,
The wait is over. Virtual reality is here.
It’s going to get interesting quickly.
Samsung’s Oculus-powered Gear VR arrived last November. Facebook finally announced last week that it would begin shipping its 3-D Oculus Rift headset. HTC’s Vive is coming this month. And Sony’s PlayStation VR will soon follow.
VR technology is going to make a big difference in our lives. An apt comparison: cellphones.
Remember what it was like before cellphones? Seems like nine lifetimes ago, doesn’t it?
Well, five years from now, we’ll be looking back at 2016 as the year that divided our pre-VR lives from our post-VR lives. It already seems a foregone conclusion that 2016 will go down in history as the seminal year that marked the beginning of commercialized VR technology…
The year that forever changed how we game, work, play and exercise.
Much like mobile tech, VR tech should spawn a new generation of exciting and sustainable companies, with some growing quite large.
Five years from now, we’ll be asking each other, “so what big VR company did you invest in back in the day?”
And I hate to say it, but most of you will say you didn’t invest.
Oh, you’ll have your reasons. There’s never a shortage of reasons why one doesn’t invest in the early days of a game-changing technology.
I’ve heard most of them. I’ve also heard investors – brilliant and very rich investors, by the way – kick themselves for not having the conviction to invest in Facebook, Twitter, Google or Uber because they underestimated the impact of their technologies.
Yet some investors were so intrigued by these companies’ vision and early signs of execution that they did invest.
Many made small fortunes. Some made large fortunes. Granted, they were beneficiaries of best-case scenarios. But that’s always the case with huge winners.
Now you have a similar opportunity. This startup’s ceiling is among the highest I’ve ever seen. And I must warn you, most startups don’t fulfill their potential; they never make it to the mountaintop.
But some do. Isn’t that why we invest in startups? If you like the idea of making 10X to 50X profit, this company has that potential.
Its name is Virtuix. And it performs VR magic.
My partner, Adam Sharp, provides a great description of Virtuix’s product, the Omni…
The Omni is designed to make virtual reality more active and immersive. It allows you to walk, run and jump while staying in a small confined space. This system is arguably the best way to make VR truly immersive. When you can look all around a virtual world, it would feel unnatural if you couldn’t move toward something.
I encourage you to read his full article by clicking right here. Adam and I have spent countless hours researching every aspect of this company. We haven’t tried out the product yet (still trying to fit it into our schedule). But we’ve watched a dozen videos of the Omni in action. Users really like it. (See for yourself here and here.)
And we believe it has all the ingredients necessary to make a huge impact. Here’s why…
- The market it addresses is large and growing. VR is expected to develop into a $30 billion market by 2020, says tech research firm Digi-Capital.
- It’s a critical enabler. It could be the missing piece that launches a new and exciting era of immersive gaming, followed by immersive experiences in other areas. It gives games a “feeling of presence” that we expect game content makers and developers will embrace en masse.Let me put it this way: If Virtuix doesn’t provide this capability, another company will. But which one?
- Virtuix has no serious competitors. A couple of companies are raising on the Kickstarter site. But they’re just starting out, and at least one of them is struggling to keep afloat. This market is too big and too potentially profitable for competitors not to show up at some point. In the meantime, Virtuix has surged ahead. It has all the advantages that come with first-to-market forays and first-of-its-kind technology.
- Lots of pre-revenue traction. Virtuix has developed partnerships with game developers and headset makers. It’s already building its brand with eSports, PC gaming and VR enthusiasts. And it’s filed 12 patent applications. It’s begun delivering on more than 4,000 preorders ($2 million worth of Omnis). Shipping is on schedule and going smoothly, founder Jan Goetgeluk tells me. Very strong early execution here.
- Investor confirmation. Several well-known investors have written checks to Virtuix. Mark Cuban invested in not one but two previous seed rounds. Scout Ventures is a big New York City VC firm. It first invested in Virtuix in 2014. Other VC investors include Tekton Ventures, Western Technology Investment, Scentan Ventures, QueensBridge Venture Partners and 2020 Ventures. It’s a very positive sign that several of them plan on participating in this round (Scentan, Western Technology, Tekton, 2020 and Scout).We also have strong crowdfunding confirmation. More than $30 million worth of “Indicated Interest” was logged during Virtuix’s “testing the waters” period. It has already raised $4 million in its current round.
You will invest alongside VC companies with exactly the same terms that they have. There is no preferential treatment based on size of investment or investor pedigree. I like that. The only difference is several of these VCs know Virtuix better than you do.
Because they’ve invested before in the company, these VCs know Virtuix intimately and are willing to put in more of their money (at a higher share price). These “insiders” are just as bullish on Virtuix as Adam and I are… a great sign.
How It Works
The Omni took four years to design and test. It’s made of low-friction materials. The platform you stand on is “slick” and so are the special shoes you wear. Advanced sensors transmit your movements into data, which controls your VR “avatar.”
The Omni is compatible with almost all head-mounted displays. These include the Oculus Rift, HTC Vive, Samsung Gear VR and Google Cardboard. (It is important to note that the Omni works with these products and in no way competes against them or replaces them.)
The device is also compatible with almost any content that uses standard first-person game pad input and is VR enabled.
The Founding Team
Serious and determined. They’ve done an admirable job so far. Founder and CEO Jan Goetgeluk called me from Taipei, and we chatted for 45 minutes. He was very forthcoming. He says gaming is just the beginning. There are many other markets where his VR technology would be very useful, such as fitness/training, virtual tourism and training simulation.
Jan developed the Omni after-hours, working as an investment banker by day and an inventor by night. After two years of experimenting, he left his day job and founded Virtuix. Jan has a Master of Science in mechanical engineering and an MBA.
Jan’s partner, David Allan, is the president and COO. Before joining Virtuix, he was responsible for setting up a Chinese manufacturing subsidiary employing more than 200 workers for ERP Power, a California-based electronics startup. Before that, he was co-owner of a Taiwan-based original equipment manufacturer hardware business. David has lived and worked in Taipei for the past 25 years. He now spends most of his time in Virtuix’s 11-person South China office.
Investment Opportunity Summary/Terms of Investment
Company Vitals: 31 employees. Headquartered in Austin, Texas, with offices in California and China. Selling price: $699 per Omni. Shipping began in December 2015. Funds raised to date: $8 million. Virtuix’s Offering Circular. Website: http://www.virtuix.com.
Sector: Virtual reality
Status: Raising $10 million to $15 million under Regulation A+ (where anyone can invest, not just accredited investors)
Share Price: $2.33
Implied Valuation: $35 million
Previous Price per Share: $0.80 to $1.20
Offering: Series A preferred equity
Minimum Investment: $1,000
Platform: SeedInvest
Portal Instructions
I’ve written detailed instructions for those of you who would like more guidance on how to join SeedInvest and make your investment. Just click here to access the portal instructions document.
Or you can take the first step right now to join SeedInvest by going to its website, clickingright here or pasting https://www.seedinvest.com/ into your URL box.
You’ll then see this…
Click on the blue box that says JOIN AS AN INVESTOR, then follow the instructions.
Once you’ve joined SeedInvest, you’re ready to make your online investment. So click onSeedInvest or type seedinvest.com into your URL window. Then click on the far left box that says Virtuix…
You’ll see this…
Click on the INVEST IN VIRTUIX blue box, then follow the instructions.
If you’re having difficulty at any point in the process, I suggest you click on the “Chat with Us” link, which is on every page as you go through the application process.
Invest early and well,
Andy Gordon
Co-Founder, Early Investing