Australia's Advent buys VR gaming business

Advent is investing alongside founders and management as well as local VC firm Carthona Capital, which first backed the company in 2014 and is said to be retaining a meaningful stake. Advent typically invests in a range of A$25-35 million ($18-26 million). Financial terms have not been disclosed.

Zero Latency is recognized as a global leader in the location-based VR gaming niche, which entails gameplay for up to eight people in warehouse-sized venues operated by the hardware and software provider. This is opposed to the more common in-home systems offered by most VR gaming companies.

Zero Latency helped pioneer the category, setting up its first venue in 2015; it now has 50 locations across Asia Pacific, the Americas, Europe, and the Middle East. These range from 1,378 to 2,400 square feet in size.

Some of the company’s closest competitors include Russia’s Anvio, Canada’s Ctrl V, and US-based Sandbox VR, which have about 20, 10, and 10 venues respectively. Sandbox raised $11 million from Andreessen Horowitz and celebrities Katy Perry and Justin Timberlake in 2019.

Much of the investment rationale hinges on the notion that the location-based VR segment is at an inflection point globally. The market – also known as free roam VR (FRVR) – is currently estimated to be worth $3.6 billion and set to grow at about 30% a year through 2026.

Advent said it sees this space as a land-grab opportunity in which Zero Latency has the potential to triple the size of its venue portfolio globally.

The investor hopes to leverage its experience with other location-based business expansions, including childcare provider Junior Adventures Group and cosmetics treatment business Silk Laser Clinics. Both have been partially exited, by a secondary sale and an IPO, respectively.

“It is the ideal time to get into the location-based VR sector, with consumers increasingly seeking new experiences, creating a large opportunity for Zero Latency VR, which is one of the fastest-growing, and the most disruptive player in this space,” Symon Vegter, a partner at Advent, said in a statement.

Advent is investing via its seventh fund – styled as Fund II, marking the conclusion of a succession planning process – which closed at A$300 million in 2018.

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• Topics
• Australasia
• Consumer
• Technology
• Buyouts
• Australia
• Advent Partners
• gaming