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AltspaceVR Shuts Down Due To Money Problems: Failed Funding Round, Slow VR Market Growth To Blame

29 July 2017, 8:26 pm EDT By Carl Velasco Tech Times
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One of the most significant VR startups officially announced its shutdown on Friday, July 28, in a lengthy blog post aptly titled "A Very Sad Goodbye." AltspaceVR says it has run into "unforeseen financial difficulty" and will shutter its windows and doors by Aug. 3.

AltspaceVR Is No More: VR Social Network Closes Its Doors

A virtual reality social network at its core, AltspaceVR has hosted just about any type of socially focused VR content one can think of — comic stand-ups, presidential debates, and just plain hangouts. AltspaceVR succeeded in polishing the inherent interactivity of VR experiences into more communal ones; connecting people with other people.

The company expressed its remorse via the blog post, calling the shutdown a horrendous experience for everyone involved.

"This is surprising, disappointing, and frustrating for every one of us who have put our passion and our hopes into AltspaceVR."

Gerard Gottheil, a spokesperson for AltspaceVR, clued The Verge in on the exact occurrences that lead to the fallout. He says a supportive group of investors gave the company money in 2015. Things looked bright and promising.

"It looked like we had a deal for our next round of funding, and it fell through," he said.

With the deal crumbling, coupled with the "general slowness" of VR's market growth, investors became apprehensive of lending AltspaceVR cash. The company attempted to raise funds but has since run out of time and money.

As of this time, AltspaceVR has 35,000 active monthly users, a number which it saw as a "pretty good for the size of the VR market." That said, Facebook's ownership of Oculus, perhaps the most recognizable name in VR, currently stood as formidable competition. A social behemoth such as Facebook would have easily bled AltspaceVR dry, had it ever come to that.

In its heyday, AltspaceVR managed to host big-name guests across a range of fields: for comedy that it brought on Reggie Watts; for science, Bill Nye; and it even struck up a partnership with NBC for the 2016 presidential election.

AltspaceVR became open in public beta in early 2015, long before Facebook's social VR plans came to fruition, thus rendering AltspaceVR as one of the earliest and best-known spaces for social VR experiences.

Users can access AltspaceVR across several of the most popular VR platforms: Oculus Rift, Gear VR, Daydream, and HTC Vive.

What's Next For AltspaceVR

Despite the shutdown, Gottheil hints that the company won't completely end yet. That said, the future still looks foggy. He says the people who worked on AltspaceVR created "some awesome technology — things that we think will be foundational to the future of social VR."

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