When Chen Jingshu and two college friends, Ayden Ye and Richard Chen, left their jobs in Silicon Valley in 2016 to go back to China to found a platform focused on virtual reality (VR) content, VR was still considered a niche trend.
Fast forward to 2020, the entrepreneur idea, sparked during a skiing trip in 2016 when Ye showed some clips filmed by his Samsung Gear 360 camera, went from being an online platform for VR lovers to also become a company producing professional VR content with a wide network of VR spaces across China.
“That feeling was direct and strong,” Chen said about the defining moment when she decided to take the plunge and found VeeR VR. The Stanford University management science and engineering grad always wanted to launch her entrepreneurial career. In her college life at Shanghai Jiaotong University, she co-founded a campus event listing platform called Tongqu, which means “Go together” in Chinese. The website and its apps are still functional now, serving as a social hub for Jiaotong University’s students.
In 2017, VeeR VR firm raised USD 17.5 million in its Series A round from Bertelsmann Asia Investments, DCM Ventures, and Hony Capital. In 2018, the three co-founders were featured by Forbe’s 30 under 30 consumer technology list, as young innovators and disruptors in their field.
Over the years, the firm went through what the VR sector in China has experienced—a speculative period in 2016, followed by a bubble in 2017 and 2018, and then a re-emergence.
Now, China’s VR market is predicted to hit RMB 54.45 billion (USD 7.9 billion) by 2021, according to Wu Shengwu, deputy head of the electronic information division of the Ministry of Industry and Information Technology (MIIT), as quoted by state media Xinhua.
In a field where many startups have failed, Chen and VeeR VR are on a mission to “bring the best immersive entertainment to the world” using a sustainable business model, Chen says.
A new path
The company began with the goal of becoming a YouTube-like platform for the emerging VR industry. But in 2019, Chen, as chief product officer of the company, decided to make another big shift in the firm’s strategies and business intentions.
In its first phase, VeeR VR grew as an open hub for VR creators around the world, who uploaded videos, panoramic photos, and interactive content. Viewers could access the content via its website, apps, and through software installed on VR headsets like Oculus, HTC’s Vive, and Xiaomi VR.
Chen’s strategy switch was about experimenting with self-produced VR films and offline distribution, and quickly, the startup began to go offline by setting up mini VR cinemas in malls across China.
“The transformation was hard,” Chen said. “It meant we had to give up many things we had established, for example, a dynamic VR lover community that took loads of effort to cultivate since early-stage.”
The startup—now with its own production team—regularly partners with other studios on VR projects and teams up with renowned directors to produce professional VR videos. As the startup pivoted to professional-generated content (PGC), it began cutting out UGC little by little.
The firm also launched Zero Space, a VR cockpit that allows users to sit and watch paid videos from VeeR’s premium movie library in malls, cinemas, and tourist areas. So far, there are over 20 Zero Space stores in China, in cities including Shanghai, Shenzhen, Beijing, and Nanchang.
The strategy adjustment was partly due to the VR industry’s immaturity, Chen said.
With VR content still not popular on a large scale, monetizingVeeR VR on traffic would not be possible until the technology would become mainstream. Instead, offline distribution and original content production locations appeared more promising, and Chen decided to take that path.
Will 5G initiate a VR revolution?
With the adoption of 5G, many media and pundits have resumed their passion for VR technology. The technology, with its larger bandwidth and lower latency, could potentially take the VR industry to the next level by solving some of the current biggest challenges, namely, lags and buffer time, which can undermine the VR experience.
But while speculation about 5G and VR has benefited the market, Chen believes 5G technology still needs three to five years to go mainstream. The real pain point in gaining a wider audience for immersive content, Chen says, is the current VR hardware, which does not meet consumer demands.
“5G will probably solve the disturbing issue of bandwidth and improve the streaming speed, also boosting the development of cloud-based games, but the key problems are high-quality VR content and the hardware,” she added.
According to Chen, existing headsets are too expensive, too heavy, and not powerful enough. Many users feel dizzy after wearing a cumbersome headset for a long time.
Opportunities amid the challenges brought by the COVID-19 outbreak
Lately, the startup’s business has been hurt as many other companies by the COVID-19 outbreak. As almost 90% of offline cinemas are not functional during this period, the firm has been also affected. Its ongoing B Series round plan has been shelved, while some film projects have been postponed.
To stay active and bring some outcomes out of the complex situation, VeeR VR started a documentary project, in which invited VR creators across the country to record one-minute footages of their lives during the quarantine caused by the pandemic.
Hundreds of creators from 32 provinces across China participated in the project, said Chen. Among the VR videos, there is one showing a community volunteer disinfecting the streets and alleys, a journalist reporting from a hospital in Wuhan, the center of the outbreak, and a filmmaker who uses drones to document the impact of the virus on Chinese cities.
The documentary, named “One more minute,” is now under post-production.
“VR can make a viewer become an experiencer,” Chen says. She believes that VR could be a medium to disrupt the traditional relation between people and content.
This article is part of KrASIA’s “Inside China’s Startups” series, where the writers of KrASIA speak with founders of tech companies in the country.