TheWaveVR Raises $6 Million Series A Round to Bring Social, Interactive VR Music Experiences to the Masses
Despite years of investment from some of the music industry’s most prominent leaders, the future of virtual reality for music remains surprisingly nebulous.
To date, no consumer-facing VR app in any industry has made money -- due to a combination of expensive production costs, which can reach hundreds of thousands of dollars per project, and relatively expensive, clunky headsets, which are still seeing slow consumer adoption.
This has created a perception that only the biggest artists and corporations can afford to build meaningful VR experiences for music. For instance, MelodyVR is banking on deals with Warner/Chappell, Sony Music, Universal Music and Roc Nation to attract users to its app, which launches later this year. Live Nation has an ongoing partnership with NextVR and Citi to stream shows by the likes of Imagine Dragons and Lady Antebellum. Magic Leap, a VR startup that has raised over $2 billion in funding over the last four years but has yet to release an actual physical product, teased its forthcoming headset and software in part through a collaboration with Sigur Rós.
Two elements are blatantly absent from this landscape: an affordable VR experience built with the long tail of the music industry in mind, and an experience that celebrates user-generated content (UGC) and offers truly interactive, VR-specific tools for social engagement between artists and fans, rather than setting the entertainment agenda top-down and simply broadcasting 360-degree concert videos through a VR headset.
Enter TheWaveVR -- a platform that enables users to create custom social music and visual-arts experiences in VR, has approval from Steven Spielberg and is betting its business precisely on filling in these long-tail gaps in the market.
Last Thursday (Apr. 19), TheWaveVR, which has 14 employees, announced a $6 million Series A funding round, bringing its total funding to date to $10 million. Led by RRE Ventures, the Series A also included KPCB, Upfront Ventures and Greycroft’s VR Gaming Tracker Fund, plus strategic investors Andy Ross (member of OK Go), Alex Chung (co-founder/CEO of GIPHY) and Matt Brimer (co-founder of General Assembly and Daybreaker). It was also revealed that Alice Lloyd George, principal at RRE, would join TheWaveVR’s board as its newest member.
With an additional $6 million in tow, TheWaveVR will focus on improving its UGC tools, expanding internationally and porting to additional VR platforms like Oculus and Playstation (as of press time, the app is available only in the U.S. via Steam). In addition, the startup is opening a new L.A. office to facilitate more artist collaborations on live VR concerts and DJ sets. TheWaveVR’s art director David Wexler, a.k.a. Strangeloop -- who has provided groundbreaking stage design for A-list acts like The Weeknd, Kendrick Lamar and The Rolling Stones -- is based in L.A. and will help facilitate these collaborations.
In fact, even with its focus on the long tail and UGC, TheWaveVR certainly has no shortage of big-name endorsements: it's already worked with artists like Tokimonsta and Flying Lotus' Brainfeeder label on VR concerts and album release campaigns, and was tapped as the official VR partner for Spielberg’s blockbuster Ready Player One -- recreating the film’s zero-gravity nightclub The Distracted Globe in an activation that premiered at SXSW this year.
“Working with Steven Spielberg and Warner Bros. really set the bar higher for us, in terms of moving from just a fun demo into a real service for music fans and for the creative community,” Adam Arrigo, co-founder/CEO of TheWaveVR, tells Billboard.
On that note, when it comes to TheWaveVR’s vision of VR's role in the music industry, these high-profile partnerships are only the tip of the iceberg. Unlike many of its competitors, TheWaveVR is aiming to be a valuable, actionable service for artists and fans, not merely a one-directional entertainment channel -- maximizing user participation in an artist's creative process, while allowing artists of all genres, particularly those from more niche scenes, to connect meaningfully with their fans in ways that traditional 2D platforms like Spotify, SoundCloud and Mixcloud might not be able to afford.
A crucial component of TheWaveVR's service-oriented offering is the Wave Builder, a tool that enables anyone to build their own 3D concert venues and visuals. In Nov. 2017, TheWaveVR was announced as one of the earliest partners with Google’s Poly API, which allows applications to search and download user-created 3D assets at both edit and run time. Through the integration, users can import the default template for TheWaveVR's “Home Cave” stage and dancefloor into Google’s 3D-modeling software Tilt Brush, build their own visuals with the help of thousands of prebuilt 3D objects in the Poly database and then access their new creations inside TheWaveVR, where they can host their own parties with other users.
“It’s a native content format for VR DJ parties,” says Arrigo. “DJs can control all of these visual parameters, flipping through sequences of interactive, 3D states that they can build themselves, at the same time they’re controlling the music.” Users have already uploaded hundreds of assets to Poly for use in TheWaveVR, and the company has also directly commissioned artists such as Stuart Campbell (a.k.a. Sutu) and Liz Edwards to design visualizations for higher-profile shows, including for Ready Player One.
Interestingly, the Wave Builder was also a secret weapon for persuading investors: TheWaveVR built their own pitch deck using the Wave Builder, and conducted all of their VC meetings and even signed their term sheets in VR within their own app. The immediacy, ease of use and remote capabilities of the tools enabled the team to raise most of their Series A round within the span of just a few weeks, from their home base in Austin, TX.
“The 'elevator pitch' for TheWave is hard to construct verbally or with a two-dimensional pitch deck,” says Arrigo. “Even with 2D video, you get only a partial understanding of what the product really is. You need to incorporate co-presence with other people in VR itself into the pitch, otherwise it’s hard to demonstrate why it’s so good. It also eliminates the need to fly all over the country for meetings, which is what enabled us to do it so quickly -- we held three separate VC sessions within a three-hour period.”
When asked what convinced RRE, which was also a seed investor in TheWaveVR, to participate again in the Series A round, George cites not only the unique pitch and term-sheet signing process -- “the experience was epic, and as a startup you have to live and breathe your product,” she tells Billboard -- but also a high level of user engagement that has yet to be replicated elsewhere in the VR-music landscape.
“We’ve spent time within TheWave with power users who are coming back every week, and seeing firsthand why they love the product so much has really reinforced our confidence,” says George.
Indeed, power-user sessions in TheWaveVR can last as long as ten consecutive hours, and users are hosting several of their own parties, or "waves," every week (exact dates and times are listed on TheWaveVR’s community calendar). In Nov. 2017, TheWaveVR attracted as many as 600 users simultaneously for Kill The Noise’s DJ set, which also drew over 32,000 views on its Facebook livestream.
For musicians, the appeal of apps like TheWaveVR lies in the ability to build truly immersive, interactive worlds around music that invite not just a heightened level of user engagement and creative understanding beyond the 2D experiences on streaming services, but also tangible, self-organizing community development around a piece of work -- a sort of re-imagining of the timeless listening party for a mixed-reality future.
"When we first considered investing in TheWave, we spoke with a lot of people in music and other creative communities, and they were so excited about the opportunity to express their creative visions in a more complete way -- to move from simply the linear, sequential album arrangement to creating an entirely new world from scratch, and sharing that with their fans," says George.
"We can literally meet up inside Tokimonsta’s new album right now and talk about it," adds Arrigo. "Or we could build our own private, custom space to listen to the album."
TheWaveVR has already worked with indie electronic labels like UKF, Drum&BassArena and Zeds Dead's imprint Deadbeats on branded showcases, and plans to expand its label partnerships roster this year. Importantly, when TheWaveVR recently asked its Twitter followers what genres they wanted to hear in future parties, subgenres like electro-swing, vapor twitch, liquid funk and UK drill that rarely make it onto major-label radars emerged in the responses -- signaling that TheWaveVR's most engaged user base seems particularly interested in increasing niche creative communities' access to VR, instead of leaning only on premium artists and content like what MelodyVR and NextVR seem to be doing.
"TheWave certainly has big names interested in the product, but I don’t think the presence of a well-known artist versus a smaller one will sway the numbers that much," says George. "People are not going to go out and buy a new headset just because some big-name artist is putting on a VR concert next week. I think it’s about getting the tools, UX and experiential aspects right, and about catering to our existing user base and making sure they love the product. TheWave aligns really well with artists in terms of creating a more complete, full-stack experience, but I don’t think the artists' caliber is the only reason users are in TheWave."
Generally speaking, VR can also break down barriers for low-income and minority groups, disabled populations and other communities who either cannot afford or are physically held back from attending Coachella-level festivals in person. "To be able to access these VR experiences from your living room and have these human connections in a safer, more diverse environment is really exciting to me," says George. "It enables a level of scale you can’t really get with more elitist festivals."
One looming question on the investor side is whether TheWaveVR can devise a sustainable monetization model around UGC for visual music experiences, when so many predecessors in this space have failed. For instance, short-form video apps like Vine and Musical.ly have struggled to find a business model even after multimillion-dollar acquisitions by big-tech corporations Twitter and Bytedance, respectively.
But one key advantage that TheWaveVR might have over its predecessors is that its primary user acquisition and engagement channels actually come from outside the music industry. Steam is the world's largest digital distribution platform for PC gaming, while TheWaveVR maintains its channel for planning user concerts and parties on Discord, a voice and text chat app aimed at gamers.
"I'm not worried about monetization because the communities into which TheWave has tapped -- the gaming community and the Steam community -- are already really willing to pay for things that they value," says George. "It's different from the dynamics on social apps like Vine and Musical.ly, where people largely expect the experience to be free. On the asset and consumable side, there’s strong in-app purchase potential for TheWave, with the number of items people are collecting and using as they explore the spaces. There’s also a lot of interest on the sponsorship side, and we’re even exploring partnering with real-world venues. As for concert ticketing, we'll cross that bridge when we get there, and the monetization around that will be similar to live concerts in the real world."
As for artist collaborations, the creative and commercial possibilities also extend far beyond music. Aside from its label partnerships, TheWaveVR is also working with visual artists on VR-based graphic novels and more complex virtual sculptures, suggesting that music is a powerful -- but by no means the only -- catalyst for communal, mixed-reality art experiences.
"I'm very excited about the early, playful work we’re seeing so far on the art side, and the types of things you can do with people from around the world that are impossible in 2D environments," says George. "Ultimately, it's all about human connection. I don't think we’re aiming to have users just sit around watching music passively. We're aiming to have the most interactive, magical experience possible in VR."