- $1M China Daily E-Sports distribution deal Dec. 2016
- HTC vSports partnership, Life Fitness vSports, and Fitbit vSports partnerships launching Jan. 2017
- Sold via major online retailers Amazon.com, BestBuy.com, Target.com, and GameStop.com
- The median time customers play VirZOOM is over 25 minutes per day with less than 20 hours between sessions
- Amount raised:
- US $972,000 :
- VirZOOM, Inc is “testing the waters” to gauge market demand from potential investors
- An indication of interest made by a prospective investor is non-binding and involves no obligation or commitment of any kind
- Securities are not for sale, as the offering has not been qualified by the Securities and Exchange Commission
- No money or other consideration is being solicited
VirZOOM creates engaging VR experiences powered by you. Pedal your VirZOOM Controller to propel yourself through endlessly exciting VR games. Power a horse in a race, a tank in battle, a fire-breathing dragon through mountains. Patent pending software controls keep you feeling good. A workout without the work.
In early 2014, VirZOOM co-founders Eric Janszen and Eric Malafeew set out to get the sedentary consumer moving with a new concept: virtual reality exercise games. They committed themselves to creating a fun way to exercise using virtual reality to get millions of under-exercised consumers on the road to health and fitness. The result is an entirely new kind of game and exercise called virtual sports (vSports).
vSports is real physical competition in virtual worlds based on VirZOOM's inexpensive and versatile patent pending virtual reality exercise game platform. With partners Fitbit, Life Fitness, HTC, and AMD only VirZOOM can bring exciting physical and immersive online virtual game competition to millions of consumers all over the world. Players of all ages engage in thrilling competitive virtual challenges to consumers including cycling, F1 racing, and tank battles all powered by the player. Players can engage in real time online challenges or engage at a later time for high score. VirZOOM statistics show customers do not get bored with vSports the way they do with other indoor equipment-based exercise. The play VirZOOM vSports for longer periods more frequently over time.
VirZOOM employs an exciting new technology, virtual reality, to solve an old and very large customer problem: motivating sedentary people of all ages to exercise.
VirZoom vSports Content
VirZOOM Arcade is an ever-expanding collection of free multiplayer online VR sport games, available on Steam and the PlayStation Network store with updates delivered automatically to you. You can also use the VirZOOM Gamepad Emulator to turn your bike into a virtual joystick, keyboard, and mouse to play popular games on PC.
The my.virzoom web service allows players to track performance, set goals, and challenge friends to competitions, and integrates with Fitbit and Strava. VirZOOM's own exercise bike based VR game controllers are sold online directly and through online retailers Amazon.com, BestBuy.com, Target.com, and GameStop.com, and in 2017 through a growing number of regional vSports Centers across the U.S. and China. The exercise bike portion of VirZOOM's own VR game controller is sub-assembled in a factory in China with IP-sensitive electronics manufacturing and final assembly done in a Sony factory in Mexico. VirZOOM Arcade games are distributed on Steam for PC and PlayStation Network for PS4.
VirZoom vSports Controller
Uniquely VirZOOM virtual reality games are played by pedaling and leaning while seated on a modified exercise bike, with control buttons and triggers for game play. The faster you pedal in the real world the faster you move in the virtual world. VirZOOM's sensor technology turns a stationary exercise bike into a specialized VR game controller. VirZOOM's ever-evolving and growing library of virtual reality exercise games, compatible with all major VR systems including HTC Vive and Sony Playstation VR, are designed from the ground up by a unique AAA game development with feedback from hundreds of alpha sites, betas sites, and customers since July 2015.
After building a prototype with a bicycle and laptop in Eric Malafeew's basement in early 2014 the two entrepreneurs decided the concept had legs -- literally. Over the next year Malafeew evolved the prototype and patent while Janszen developed the business model and business plan. By February 2015 they formed VirZOOM. In March Janszen raised the initial $1.8M in seed funding, mostly from the investor group that egged him on in early 2014, and by April 1 the core team was in place in Harvard Square offices in Cambridge, MA.
Malafeew brings Virginia Tech undergraduate and MIT graduate engineering training and 20 plus years of robotics, simulation, and video game and game controller design and engineering expertise to the project. He recruited the entire the AAA game development and hardware engineering teams from colleagues. He also contributes a wealth of game industry contacts. Janszen brings decades of product management, sales, operations, finance, and business design and planning expertise as well as board experience to the project. He also brings accredited investors from among friends and colleagues he has known for over 20 years who have supplied 90% of the company's funding to date. He is personally the largest single investor in the company.
In Q4 2016 VirZOOM Controllers shipped in volume to consumers through its distributor COKeM International to online retailers Amazon.com, BestBuy.com, GameStop.com, and Target.com. VirZOOM Arcade Games distributed via Valve's Steam store and Sony's Playstation Network (PSN), the largest game stores in the world.
The goal of Q3 and Q4 2016 shipments was to establish an initial customer base for collection of product feedback, telemetry data, and refinement of supply chain and manufacturing processes. In 2017 the company will shift gears to focus on increasing unit sales volumes and average sales price while lowering COGs and cost-of-sales via vSports business execution.
Total COGs including shipping was $320 and $205 respectively for the first two batches units built and sold in 2016, including NRE costs to set up manufacturing processes in China and Mexico. With manufacturing processes established COGs is expected to decline to $105 by Q4 2017. By the end of 2017 the company expects to license VirZOOM sensor and security technology to 3rd party VirZOOM Controller makers and phase out specialized exercise bike manufacturing by the end of 2018.
The VirZOOM Controller sells for $399.95 directly from its web site and also through major online retailers via its distributor COKeM International. Gross margins on shipments of the 2nd batch of VZ Controllers through distribution was close to zero while gross margins on direct sales averaged 40%.
Shipments of tethered VR system sales by suppliers Oculus, HTC, and Sony were delayed from Q1 to Q2 2016 and 2016 unit volumes were below analyst forecasts reportedly due to Sony PSVR supply constraints. Nonetheless VirZOOM realized Q4 2016 revenue of $325,000 versus the company's $250,000 revenue forecast.
The company's flagship VirZOOM Controller, made in China and Mexico, embodies unique sensor and security technology that make viable commercial agreements possible in the Chinese market where prevention of pirating of hardware and software is a critical product requirement. This sensor and security technology enabled the company to close a $1M distribution deal with a major Chinese state-owned entity Daily E-Sports Datang Network Company Ltd.
The company's sensor and security technology is designed to be licensed via OEM agreements to fitness equipment makers who will supply VirZOOM Controllers with embedded circuits and firmware for VirZOOM Arcade game use. Initially this sensor and security technology is embodied in an add-on aftermarket product to cause certain existing exercise bikes to be used to play VirZOOM Arcade games, that is, to make them "VirZOOM-Ready." In January 2017 Life Fitness became the first fitness equipment maker to engage in a VirZOOM-Ready pilot program.
Starting in Q1 2017 VirZOOM will begin to execute on its next phase of development as a virtual sports or vSports platform company. The company has as of the end of December 2016 contracted 18 vSports Centers across the U.S. to demonstrate VirZOOM and sell vSports Systems comprised of the VirZOOM Controller, VirZOOM Arcade games, a VR headset and PC or console. The company plans to have 100 vSports Centers across the U.S. by the end of 2017. If each vSports Center sells on average 12 units per month by Q4 2017, VirZOOM can operate on a cash-flow break-even basis without recurring revenue from subscriptions. Recurring revenue from my.virzoom subscriptions are planned to begin in Q2 2017.
From company founding in April 2015 VirZOOM's one-of-a-kind technology and business team brought an entirely new game hardware and content product to market in 14 months, and by Q4 2016 was shipping product in volume across the U.S. and Canada, on $4.4M in seed financing.
Use of $5M Series A funds is to build out the vSports sales channel, instituting the recurring revenue model, achieving reductions in COGs and increasing sales volumes at higher ASP to achieve cash flow breakeven by Q4 2017.
The total available market for spin class consumers and for hard core bike enthusiasts is relatively small compared to the size of the market of all of the consumers who do not have a form of exercise they enjoy.
VirZOOM is not targeted at consumers who have a form of exercise they enjoy but rather at everyone else, at the vast majority of consumers of all ages who are looking for a new form of exercise that they do enjoy.
Through thousands of play tests with over ten thousand subjects VirZOOM has since early 2015 refined its combination of exercise games and controller to create an exercise experience that we call vSports that they do enjoy.
Customer reviews and telemetry data confirm that VirZOOM has achieved this goal. The next task is to expand the business.
One gating factor for VirZOOM product adoption is VR system cost. As mobile VR options such as Google Daydream make VR more affordable the VirZOOM platform will become affordable and accessible to more and more consumers.
The VirZOOM product roadmap has content for Google Daydream and GearVR by April 2017 and for Microsoft VR around the same time. When mobile VR ships in the millions of units with android devices the total available market for VirZOOM will expand significantly.
Another gating factor for VirZOOM product adoption is experience. VirZOOM is so new that consumers cannot imagine what it's like to use the product. They have to try it. But how can VirZOOM make the VirZOOM experience available to consumers without spending millions on specialty stores the way Peloton did?
That's where VirZOOM vSports Centers come in. Already the company has 18 in operation. By the end of 2017 at least 100 will be up and running across the U.S.
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Frequently Asked Questions
"The SEC has qualified this offering" means the SEC has permitted VirZOOM, Inc to offer for sale the securities described in the Offering Circular to investors such as you. The SEC is not judging the merits, accuracy, or completeness of the offering and information in the Offering Circular. Rather, the SEC is merely ensuring VirZOOM, Inc has met all legal disclosure and regulatory requirements necessary to make these shares available to you.
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Currently there is no market or liquidity for these shares. Right now VirZOOM, Inc does not plan to list these shares on a national exchange or another secondary market. At some point VirZOOM, Inc may choose to do so, but until then you should plan to hold your investment for a significant period of time before a “liquidation event” occurs. A “liquidation event” is when VirZOOM, Inc either lists their shares on an exchange, is acquired, or goes bankrupt.
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This is VirZOOM, Inc's fundraising profile page, where you can find information that may be helpful for you to make an investment decision in their company. The information on this page includes the company overview, team bios, and the risks and disclosures related to this investment opportunity. You will also find a copy of the VirZOOM, Inc's Offering Circular, which has been qualified by the SEC. The Offering Circular includes important details about VirZOOM, Inc's fundraise that you should review before investing.
This investment is highly speculative and should not be made by anyone who cannot afford to risk the entire investment amount. In addition to these risks, you should carefully consider the specific information and risks disclosed in VirZOOM, Inc’s profile and Offering Circular.