Quick take:
- Improbable is one of the builders of Yuga Labs’ Otherside metaverse.
- The company’s CEO Herman Narula said it is close to “achieving profitability.”
- Narula said the company sold its game studios in Seattle and Canada this year.
Metaverse technology startup, Improbable, is closing in on $100 million in new funding, according to a Financial Times report. This is despite the company posting its biggest loss in 2021.
The company recorded a loss of £152 million ($173 millon) in 2021, according to a snapshot of accounts the company shared with the Financial Times. This means that the capital it raised from investors since launching in 2012 has almost dried up as the company only had £57 million ($65 million) in the bank at the end of 2021.
In April, Improbable completed a $150 million funding round led by Andreessen Horowitz (a16z), and SoftBank Vision Fund 2. The company previously raised $502 million in a Series B round led by SoftBank in 2017, two years after Andreessen Horowitz led a Series A round that raised $20 million.
Founded by gaming enthusiasts, Improbable’s original vision was to deliver a new generation of video games set in an expansive world with thousands of players at the same time. The company sold “unproductive assets” like its game studios in Seattle and Canada this year after failing to create a hit game. It tried both licensing its technology to game developers and building its own games, which wasn’t successful.
Improbable recently pivoted to building metaverses, which has steered it towards revenue growth. Improbable’s co-founder and CEO told FT that the company’s revenues should triple to more than £100 million ($114 million) this year.
“We are now a financially sustainable business with a really interesting growth rate because we found product-market fit in a new sector,” Narula said in an interview with the FT.
The company has inked a deal with Yuga Labs to build the Otherside metaverse, which will form a big part of Improbable’s revenue – which is likely to run into tens of millions – as it has been paid upfront.
Some of the payment will be in ApeCoin as well as Otherside land plots. However, Improbable told FT that it would recognise ApeCoin as revenue when the Otherside project reaches certain milestones, at whatever the market price is at that time.
Narula added that the high-profile deal has helped Improbable attract “a broad base of customers” outside of gaming.
Improbable is also currently working with the U.S. and UK military which use the company’s simulation technology for training purposes.
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