Monday 16 July 2018

Irish tech firm set to make IPO vision a reality

Immersive VR Education's David Whelan aims to bring virtual reality to education

Sandra Whelan, COO, and David Whelan, CEO, Immersive VR Education. Photo: Shane O’Neill
Sandra Whelan, COO, and David Whelan, CEO, Immersive VR Education. Photo: Shane O’Neill
Gavin McLoughlin

Gavin McLoughlin

This week Immersive VR Education will become Ireland's newest listed company. The Waterford-based outfit has got big ambitions for its virtual reality (VR) platform, and is raising £6m to build up its operation for an assault on the education market.

VR is still in its infancy but is set to become a lot more widely used, believes Immersive VR Education chief executive David Whelan.

Facebook is due to shortly release a new, far cheaper version of its Oculus Rift VR headset, which may attract a lot of new users. Mark Zuckerberg has spent big on VR and recently announced an ambitious target of getting a billion people using the technology. Other tech giants - such as Samsung, Sony and Google - have also developed headsets.

David Whelan set up the business with wife Sandra. After school, all he wanted to do was play rugby. He didn't go to college and travelled to play in Australia and Canada, working on building sites. Then one day he decided he'd had enough.

"I was standing on a building site about seven or eight years ago and it was raining. The weather wasn't as bad as it has been in Ireland recently, but it was pretty cold! And I said: 'I'm not going to be standing here next year.'

"So I went off and I taught myself how to do web development. I set up my own web development company in Waterford, I was pretty much a sole trader. That was fairly successful for a few years and I was building websites and CRM (customer relationship management) systems.

"But then the recession hit in 2008. A lot of companies get websites when they're starting up, but when the recession hit I was making no money at all being a web development business."

There were "a good few very lean years", says Whelan. But then he got a new idea. Having always been a bit of a tech buff, he got to try the Oculus Rift when it was at prototype stage.

A man came to Whelan's house with the product and Whelan's young daughters got to try it out too. After taking a VR tour of the solar system, they were able to reel off the names of Jupiter's moons - a sign for Whelan of the technology's educational potential.

"I knew I wanted to get in to virtual reality, but I wasn't a game developer myself. So I went back to what I do best - I created a website for VR content and I started reviewing VR content, which got me in contact with all the leading players in the States. But all the time as I was reviewing content most of it was video games and horror games and there were very few educational experiences."

He had an idea for a recreation of the Apollo 11 launch and pitched the idea to a contact he had made through the website.

The contact - a developer - gave him the price he would require to build out a prototype of the experience.

Whelan borrowed €1,000 from his sister and then launched a campaign on crowdfunding website Kickstarter.

Later, in a seed round, the company would be backed by Enterprise Ireland, and venture capital firms Kernel Capital and Suir Valley Ventures (which has just floated itself as Sure Ventures).

Today the Apollo 11 experience is well beyond a prototype. Strap on the headset and you are transported to the launchpad where you take on the role of an astronaut, then you're transported into the lift where you ascend to the shuttle with your fellow astronauts.

Next is the launch where you're propelled into space and can look out the window and see the Earth beneath. But for Whelan it's educational VR content that is the better bet. Experiences like the Apollo 11 one are great if they are a hit - but it's possible to have costly misses too. Education, on the other hand, seems to present an opportunity for steadier revenue.

Some of the technology it uses is pretty impressive. In one setting, a user is able to build a model skeleton - using hand controllers to lift up virtual bones and slot them into their rightful place. In another, an animated version of noted American astrophysicist Neil deGrasse Tyson delivers a lecture in a virtual lecture theatre, with animations leaping out of his slides and presenting themselves to the viewer.

A "virtual dictaphone" tool is available to record parts of the experience for saving later.

The company is targeting two separate markets - the corporate sector on one hand and third-level education on the other.

Corporate users will pay under what is essentially a licensing model to use the company's platform for corporate education - things like public-speaking programmes.

The platform will also be made available for third-level educators to create their own content for teaching students. If educators charge for the content, Immersive VR Education gets a cut. The company will also make specialised experiences available to customers for a one-time fee.

Whelan says he could have concluded a private financing round six months ago, but decided to go public to help attract the best staff.

The company will get more publicity this way, says Whelan, and there will also be a liquid market for employees to sell share options that have been converted into shares.

It's a different kind of IPO to those seen more recently in Dublin. Greencoat Capital and Glenveagh Properties are large investment vehicles targeting particular sectors - this is an early-stage family business that has chosen the public market for growth capital.

Fergal Meegan, a director at Davy Corporate Finance who advised the company on the flotation, says Davy has been spending more time on strategies for engaging with businesses like Immersive VR Education.

"We're at the stage in the economic cycle where finding growth as a capital markets investor is important and increasingly difficult. We would see the likes of Immersive as firmly in that growth category, albeit earlier stage.

"It's an exciting prospect in a sector that's set for phenomenal growth and is backed by some of the largest technology names around.

"Our mission here is to find the large companies of the future and if they're small companies here in Ireland with great growth prospects, then we're keen to make sure they have access to funding. And if they can access funding via the public markets then we're keen to ensure that can happen."

Shares will commence trading tomorrow in London and Dublin. The company is yet to break even, and investors will hope that virtual reality proves more than just a fad.

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