High Fidelity: a further $2.5 million. Now on the radar?

HF-logoThe latest Drax Files Radio Hour  drew my attention to new that Philip Rosedale’s newest venture, High Fidelity, this week gained a further round of investment capital.

The news on the move appears to have been lost amidst all of the noise coming out of Facebook’s acquisition of Oculus VR, however, VentureBeat covered the news on Wednesday March 26th.

Whether the latest round represents new investors or those already involved increasing their stake or a combination of both, remains unclear. However, the amount pushes the total level of investment into High Fidelity received close to some $5 million, including the $2.4 million obtained in April 2013 from Linden Lab, Kapor Capital, Google Ventures and True Ventures. Not bad for a company often referred to as “flying under the radar”.

Since Facebook’s move on Oculus VR, there has been a lot of speculation as to what might be next for the acquisition bag – and whether it could be Second Life. I’m not that convinced on the latter. But what about High Fidelity? In terms of Facebook, there might seem to be something of a fit – of not right now, then potentially down the road a bit.

Mark Zuckerberg, in describing his future vision for VR talks grandly in terms of “social VR” – VR which promotes “real” interaction and communications and which has real-world applications. That’s pretty much the space High Fidelity seems to be aiming at. I say appears, because High Fidelity seems to have a finger in a lot of idea pies, but most of the talk is in generalities rather than specifics when it comes to product(s).

Philip Rosedale: could his High Fidelity start-up be on Facebook's radar?
Philip Rosedale: could his High Fidelity start-up be on Facebook’s radar?

But given this commonality, and given High Fidelity is building on the kind of cool, sexy hardware – including the Rift, which apparently will work “out of the box” with whatever High Fidelity is / will be – it’s likely to have more of a bleeding-edge golly gee appeal than the decade-old, over-the-hill and decidedly unhip Second Life. Indeed, where it gets reported in the media, it already has.

Philip Rosedale is also something of a known quantity to one of the key players in FB’s acquisition of Oculus VR: Cory Ondrejka. They co-founded Second Life together and worked together as CEO and CTO until a difference on opinion separated them – and I assume that difference wasn’t enough to prevent them ever working together again. High Fidelity itself has attracted some of the key technology players from LL as well, who will also be known quantities to Ondrejka.

There’s also the matter of timescales. Facebook, as I’ve mentioned previously, seem to be jumping into the VR market-to-be for the long haul, they’re content to let Oculus VR test the waters for them in the gaming arena while looking towards more distant potential markets (and better, lighter and more ergonomic headsets that a broader cross-section of consumers will find attractive). As such, the slowly, slowly approach High Fidelity appears to be taking could synchronising rather nicely with FB’s approach.

Of course, this is all predicated on a number of things: exactly what it is that High Fidelity really has, how it fits a bigger technology picture, etc., right through to matters of equity stakes and controlling interests in the company.  However, in this latter regard, were High Fidelity to demonstrate they have something FB could leverage, it’s pretty clear that Facebook has the financial clout to make a deal worth everyone’s time.

At the very least, might be interesting to see where things go with any third round of investment into High Fidelity in the future …




10 thoughts on “High Fidelity: a further $2.5 million. Now on the radar?

  1. 2.5 mill initial investment seems high for a business with only a few employees and some computer hardware and bandwidth as expenses. And the only public item so far is a fairly cheesy vid showcasing something that could be an easily be an add-on to Second Life – ie ‘real-time avatar movement’.
    Phillips initial statements on High Fidelity talked of a voxels and fractal landscapes…. the video shows something else… and his latest statement presumes many things that are simply out of his hands (he’s saying his product will work with another – even tho the latter product hasn’t been made yet, nor has it’s latest dev kit been released, and the company just got ‘acquired’).
    I hope the new backers are seeing things that we aren’t – else i’d be wary of investing.


  2. Somewhat off-topic sorry.

    Michael Abrash, Valve’s now former VR R&D head joined Oculus VR today as “Chief Scientist”: http://www.oculusvr.com/blog/introducing-michael-abrash-oculus-chief-scientist/

    That’s fairly huge. I think it neuters Valve of the possibility of changing their minds and creating their own hardware, or supporting a different one like CastAR, and further bolsters OculusVR as THE platform for VR.

    Anyway, all the cards seem to be falling in place perfectly for OculusVR, so by extension Facebook. And the 2 billion already spent on VR is cheap compared to what they paid for WhatsApp. It wouldn’t surprise me if they spent millions, or billions more on VR and somewhere in that mix falls talent hires in Linden Lab and/or High Fidelity.


    1. A little off-topic as you say, but serves me right for posting the High Fidelity article ahead of one (which may become two) I’ve been chewing-on for the last couple of days relating to the FB Oculus VR acquistion 🙂 .

      Abrash’s post tends to shed more light on why Ellsworth & Johnson were let go by Valve as well. It will be interesting to see how Abrash and Carmack mesh at Oculus.

      There are certainly some interesting moves going on. Oculus VR walk away from the VR Alliance, then the FB buy-out announcement, and now this. Interesting times.


  3. If I were Facebook, I’d buy Valve and not High Fidelity 🙂

    Then again, HF might be cheaper… and has even more hype and less product than Oculus VR 😉


    1. FB / Oculus seem to be doing very nicely where Valve is concerned without the acquisition (/me points to Ezra’s comment on Abrash) 🙂 .


  4. I still think that Facebook is playing pure marketing buzzwords with Oculus. If Facebook truly were in the “VR market for the long haul”, they would have no need pay a ridiculous amount for the fledgling Oculus. They could easily either create their own team to do the same much cheaper, or simply wait and use any of the commercial headsets which are coming out now and will be refined over the years, using a dev kit to develop the *actual virtual reality*. Remember, Oculus is *only* a display technology. The whole connectedness and infrastructure for the 80’ies VR dream Zuckerberg is channeling is entirely beyond the scope of Oculus, and can be built to support any 3D display technology.

    So Facebook did not buy Oculus “to play the long game”; quite the contrary. They needed the hype and buzzwords *now*, most likely to have something to media-blitz with to counter the headlines Google are making with Glass. While functionality almost completely different, both products taste enough of “Virtual Reality” that Facebook can say “Me too! We’re also relevant!”.


    1. I actually agree that the acquisition may have in part been a knee-jerk reaction. FB missed-out on mobile and as you say, Google are stamping all over the AR market (which also has yet to prove itself).

      But… the fact is, we just don’t know how the the game will play out this time around with VR, because no-one is actually out there in the mainstream market as yet. So I wouldn’t be so quick to dismiss FB’s move as entirely a need to gain hip relevance.

      If all the VR hype and predictions prove true, then FB are in things for the long-haul. They don’t need to work on developing the technology for themselves. Instead, they can focus on dominating the hardware market from the get-go while working to refine the technology and make it less cumbersome and far more ergonomically attractive to a broader consumer market, while at the same time defining where and how people want to use the technology.

      So really, the acquisition is a “heads I win, tails you lose” situation for them. If the VR bubble bursts, they rode the wave for a time, thaey gained some hip recognition before they walk away with something in their back pockets they can tinker around with for the future – all for minimal impact on their bank balance. If it really takes-off, they’re potentially in a strong position to both cash-in on it and to influence its direction.

      In this respect, Oculus came cheap. Leave us not forget that FB paid-out $19 billion in January for WhatsApp, which is “only” a mobile app. How much more might they have had to pay for Oculus VR had they sat back and waited and the VR market really did take off, with Oculus VR leading the wave? It may not have amounted to anything FB couldn’t afford – but this way, FB didn’t have to wait to find out.


      1. My take is that *if* VR gets big and mainstream enough, it will not be tied to a single hardware manufacturer. Facebook could (and will have to) develop their actual VR infrastructure to support various display technologies, and possibly an emerging standard, and sitting on the Oculus name doesn’t change this.
        It may give them a good position to influence such an emerging standard, but so would throwing two billion into developing the infrastructure and software to run the actual shared VR; something which Oculus *does not address at all*. What grates for me is that Zuckerbergs buzzword visions about VR courtside seats at real events are almost completely orthogonal to the Oculus display hardware.


        1. It’s really about options. The $2 billion FB have spent on Oculus VR doesn’t deny them anything. But it does potentially offer them a leg-up on things for the reasons stated, be it standalone or as a part of any emerging standards (although it’s interesting to note, as per my reply to Ezra, above, that Oculus VR walked out of the VR Alliance almost immediately prior to the acquisition announcement. If that was coincidental, it smacks of being damned coincidental).

          “What grates for me is that Zuckerbergs buzzword visions about VR courtside seats at real events are almost completely orthogonal to the Oculus display hardware” – doesn’t mean he’s necessarily wrong, however 🙂 .

          The direction(s) in which VR might go is far from set in stone. Oculus VR were pretty much focused on a single market, one which might be said as irrelevant to a broader consumer market. Zuckerberg’s hype about VR may sit at right angles to all that has been promoted and perceived about Oculus Rift as we know it today, but it is something that consumer audience that is otherwise disinterested in VR because it is “just a games thing” can grasp and perhaps get excited about and want. Of course, promises are one thing, delivery is another. But that’s the case with VR right now …


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