Penrose Studios, the narrative VR content shop responsible for the critically acclaimed Allumette (free on Steam) and Arden’s Wake (featuring academy award winning actress Alicia Vikander) announced today it has closed a 10M series A round round of financing, led by TransLink Capital.
In addition to TransLink, this round includes new investors such as SalesForce founder and CEO Marc Benioff, Grammy-award winning artistwill.i.am, Korea Telecom, Co-Made, and returning investors Sway Ventures, 8VC, and Suffolk Equity.
Penrose Studios launched a new VR series last year, Arden’s Wake, which has two installments, The Prologue and Tide’s Fall. Arden’s Wake: The Prologue premiered at Tribeca Film Festival in 2017 and received the top Lion award from Venice Film Festival for Best VR. The second piece in the series, Arden’s Wake: Tide’s Fall, premiered at Tribeca earlier this year, and features Academy Award-winning actress Alicia Vikander (Best Supporting Actress, The Danish Girl 2016) and actor Richard Armitage (The Hobbit, Captain America: The First Avenger). Vikander gave Arden’s Wake heroine Meena her voice. Arden’s Wake tells the story of Meena, and her search for her troubled father, who disappeared during a deep-sea dive to retrieve artifacts from the ruins of formerly great skyscrapers on the ocean floor.
“In what is still an early form of storytelling and entertainment, the Penrose team has cracked the formula to create VR stories and experiences everyone can enjoy,” said Jay Eum, co-founder and managing director of TransLink Capital. “The company’s unique technology paired with the beauty of its work speak for themselves. We’re proud to work with the team and Penrose leadership to bring more VR entertainment to audiences around the world, especially in Asia.” According to its website, Translink Capital, based in San Jose, “has long-standing relationships with over 20 of the most significant Asian technology, Internet, electronic manufacturing services, and telecommunications services corporations in Greater China, Japan, and South Korea. These companies have invested in the TransLink Capital funds and have co-invested with us in our portfolio companies.” Korea Telecom is also an investor, and particularly interested in 5G, Penrose Founder, CEO and content visionary (producer, writer, director), Eugene Chung, told me in a wide-ranging interview on Tuesday afternoon.
“VR continues to be a breakthrough form of entertainment for all ages,” said Eugene Chung, Penrose Studios founder, and CEO. “As we participate in taking this new form of storytelling to the next level, we’re proud to have a great group of investors and artists with a shared vision of the future of this medium.” Chung, who was previously Head of Film & Media at Oculus, founded Penrose Studios in 2015.
I have written about Chung and Penrose in this column several times before, most recently after seeing Arden’s Wake: Tide’s Fall, at Tribeca. I called it one of the five most awesome experiences in the festival. Critics agreed. I raved about Penrose’s previous narrative VR experience, Allumette, which Wired called “the first VR masterpiece.” After seeing the first installment of Arden’s Wake at Tribeca last year, I said it was “the kind of entertainment that will make people want to buy a VR system.” In a piece in Forbes last summer, I described Chung as “the D.W. Griffith of virtual reality.” The artistic quality of the work sets a high bar for other storytellers working in this new medium.
The team of 20 at Penrose have produced over an hour of VR content on a platform of their own making, the award-winning VR development tool they named Maestro, which won an award itself at the South by Southwest Interactive Festival. By contrast, it takes several hundred people at Disney more than two years to produce an animated movie.
Like the early film pioneers, to whom he has often been compared, Chung wears three or four hats. “I’m 24/7,” he explained, adding, “My vacations are short business trips to amazing places.” When he’s not working, Chung is a voracious consumer of VR and pop culture. Chung credits his ability to manage both the business and creative work of the company to the leadership of his co-founder, Chief Scientist Jimmy Maidens, and Animation Supervisor Bruna Berford, who, like Chung, is an Oculus alumni. Among other things, the new financing will allow Chung and his team to grow Penrose’s staff “sustainably with the market”. He says they will be very discerning when adding to the team. “We want only the best, most dedicated artists who live and breathe VR every day and have a passion for great stories.”
With Arden’s Wake behind them, the company is settling into a new project about which Chung is characteristically mum. What he would say was that the company’s new projects “would be increasingly interactive and social, while emphasizing the company’s commitment to stories with emotional impact.” While Chung said he wasn’t done with the cloud kingdom of Allumette and the postapocalyptic water world of Arden’s Wake, for the next project will create yet another, completely new world.
With the market for VR content in a nascent state, and maturing more slowly than predicted, producers have had a notoriously difficult time securing financing, yet Chung says Penrose’s Series A was oversubscribed. They even opened it up so that celebrity investors could participate in the round.
Chung and the investors have faith that as the market matures premium content will command extraordinary value, as it does in other media. Allumette is free for all VR platforms on Steam, Viveport and in the Oculus Store. Chung and his investors are not measuring the product’s success by revenue, but rather by the number of downloads and the audience reaction to the fifteen-minute experience. “When our investors looked at the global performance of Allumette, they were very excited. It was a big plus in our favor.”
Arden’s Wake is not available to the public, though Chung promised distribution plans would be announced soon. He says the company is working on business model innovations and exploring emerging markets for VR in public places, museums, libraries, and educational institutions. Over a billion smartphones are now AR capable. Niantic’s Pokemon Go, Snapchat Filters and upcoming Google Maps upgrades all offer great consumer AR use cases, but no one has yet offered a narrative entertainment product for mobile AR. Penrose sees this as a huge opportunity.
Chung is likewise bullish on standalone devices like the Oculus Go, and Vive Focus. In the longer term, his investors are confident that the increased bandwidth of 5G mobile networks will spur significant advances in consumer VR. “Our plans for the future include open sandboxes for the worlds we’re creating, where people can enter and explore places like the cloud world together, and really be inside the story with the characters. Like a virtual Disneyland that you can explore again and again,” he said. “It would never be the same twice.”
Charlie Fink is a former Disney & AOL exec and Forbes columnist. In the 90s, he ran VR pioneer Virtual World. He’s the author of Charlie Fink’s Metaverse, An AR Enabled Guide to VR & AR.
This post was originally featured on Forbes.com on July 11, 2018