Deal focus: NextVR takes live VR worldwide

"Manchester United has reportedly 659 million fans, and half are in Asia. Which is massive - it's bigger than the population of the United States, roughly, and they'll never be able to get to a game," says Brad Allen, executive chairman of NextVR. With a new $80 million investment, Allen and his team are working to help those fans get into the middle of the action.

NextVR was born in 2012 when Allen and his team realized a compression technology they had been working on for 3D television broadcasts could be adapted to deliver virtual reality (VR) content instead. The potential was clear: instead of being restricted to prerecorded content, the still-in-development VR systems could receive live streams of ongoing events.

The technology support was the first step; the team knew finding content for the system would be equally important. With VR still nascent among consumers, NextVR had to promote not just its own platform; it would have to help sell the concept of virtual reality itself.

"Sports is really the only thing that matters live, or one of the two things that matters live. So bringing the biggest team sports to the fan bases is what's going to drive VR adoption to the masses out there," says Allen, adding that entertainment content such as concerts forms NextVR's other major focus.

Due to the early stage of VR hardware development, NextVR also had to think carefully about the platform it would support. High-end systems like the Oculus Rift and HTC Vive could deliver the best experience, but the cost of the headsets and the high-end PCs to run them put them out of reach of the middle-class consumers that the company was targeting.

At the other end of the spectrum, Google Cardboard offered the biggest advantage on price and accessibility; however, the company was unsatisfied with the content delivery and the inconsistent experience. In the end NextVR opted to launch on Samsung's Gear VR platform, which the company felt offered the best compromise between quality and affordability.

Once the hardware was selected, the next challenge was to find good partners to help NextVR reach customers in its target markets. Asia, and China in particular, were irresistible due to the huge potential customer base, and local partners have proven eager to bring NextVR into their markets. The majority of the investors in the latest round are from Asia, including CMC Holdings, a vehicle set up by PE firm CMC Capital Partners, and CITIC Guoan, a unit of conglomerate CITIC Group that also owns Beijing's football team.

"I think the Chinese investors see VR as a brand new medium and a new technology where they can, in one sense, be in on the ground floor," Allen says. "So it levels the playing field globally, and they can be there with this massive population that has a huge appetite around local content and international content that will give them the ability to be there from the beginning, as opposed to trying to catch up to everybody."

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