The UK tech sector was left reeling today after Improbable did the near impossible.
The London-based virtual reality firm made headlines after it announced the closure of a whopping $502m Series B from high-profile investors.
Although its exact valuation remains undisclosed, a spokesperson told Tech City News Improbable was now valued at “over $1bn”, making it part of the exclusive UK tech “unicorn” club.
But how does a London-based firm founded just five years ago go from raising a $22.09m Series A to grabbing over $500m in Series B funding from investors?
Here’s everything we know about Improbable so far.
Virtuo eyes expansion in Italy, UK and a green recovery from COVID-19
Improbable was co-founded by CEO Herman Narula, CTO Rob Whitehead and COO Peter Lipka.
Narula and Whitehead met at Cambridge University, where they both read Computer Science. It was during a dissertation review at the University’s Computer Lab that they soon realised they shared a mutual interest in multiplayer games and virtual worlds.
Lipka, credited with hiring many of the firm’s employees, worked at Goldman Sachs as an analyst developer in the proprietary accounting and risk analysis division after graduating with an MEng (with honours) in Computing from Imperial College.
The entrepreneurs, all in their mid-to-late twenties, hold a majority stake in Improbable and Narula said neither the firm’s core team nor its investors sold their stakes as part of the round.
Banking Circle: How this modern-day payments bank is revolutionising fintech space
“We intend to fully dedicate this investment to building our business and technology,” he added.
According to its website, Improbable’s mission consists of powering “previously unmakeable games and answering previously unanswerable questions that lead to a better-functioning world”, which in layman’s terms means it’s looking for ways in which it can facilitate the operation of multi-player games.
In order to do so, the firm is working on its flagship platform called SpatialOS, which will enable users to “seamlessly stitch together multiple servers and game engines like Unreal [a suite of integrated tools for game developers to design and build games] and Unity [a cross-platform game engine] to power massive, persistent worlds with more players than ever before”.
SpatialOS is still in beta and Naural said the company is also looking to explore longer-term uses for its proprietary technology.
A sweet Valentine’s Day for Bumble with February IPO: What about UK dating startups?
“We are also excited by the potential of our technology to inform the understanding of real-world systems and their emergent complexity.
“We are already working on projects with telecommunications companies, governments and other enterprise clients to explore the ability of massive, detailed simulations to drive better decisions using real-world data,” he teased.
Ambitious as it may seem, the firm has certainly managed to convince some of the world’s most well-known VCs.
Its Series B was led by Japanese firm Softbank, which made its high profile £24bn acquisition of Cambridge-based ARM Holdings in September and then went on to announce a $100bn tech investment fund. Although Softbank’s announcement was initially welcomed by members of the UK technology community, it soon transpired that half of the fund ($50bn) was to be deployed in US tech, leaving many concerned about the lack of support for homegrown and European startups. But Softbank has so far delivered.
The round also drew support from Improbable’s existing investors Andreessen Horowitz, an early investor in Facebook and Twitter; and Hong Kong-based Horizons Ventures, which has backed UK firms including Student.com, ROLI and what3words.
Although today’s announcement will be celebrated by the UK tech ecosystem, it’s rather telling that all of the firm’s Series B backers are based overseas. This will not come as a surprise to many, given that, unlike their US counterparts, European tech companies have historically struggled to raise large late-stage rounds from VCs in the continent, often having to look for funds from investors operating in the more mature tech sector that is the US.
Improbable’s raise also comes amid growing VC interest in virtual reality as a technology, one which is showing promise across a wide range of industries, including cinema, sports, live events, healthcare and gaming – the more obvious application and the one being tackled by Improbable.
But, Improbable is seemingly going further than anyone has ever gone before by building what could eventually become the pure backbone of virtual reality experiences.
Despite its outlandish ambitions, Improbable’s CEO seems undeterred and understandably motivated by the impressive cash injection his firm has just received.
“Now we have the resources to fully realise that vision over the long term with our growing ecosystem of partners. This investment further cements our long-term commitment to working with the games industry to create the experiences of tomorrow,” he said in a blog post.
Improbable has a long way to go, he admitted, but the support it has received from investors will undoubtedly accelerate its journey “enormously”.
For now, the firm remains tight lipped about what it has in the pipeline, but has vowed to share more of its technology roadmap and upcoming plans in due course.
Interested in finding out more about VR? Subscribe to receive the Virtual Reality issue of our magazine here.