Technology company Improbable is set for a £100m raise from Elrond, potentially marking a turning point after recording record losses in 2021.
London-based Improbable, a creator of virtual world technology, raised $500m (£440m) from Japanese-based conglomerate SoftBank in 2017 – a record raised for a British start-up – but recorded a £152m loss in 2021.
The metaverse technology company was touted to create blockbuster video games, where thousands of players could immerse themselves in vast virtual worlds simultaneously and have its technology used for simulations of real-life events.
However, other than success with the UK and US militaries for its simulation capabilities, it underdelivered, resulting in a £152m loss and the need to sell off various assets including development studios in North America and China in order to turn a profit.
Now, the company has changed tack to building metaverses or “immersive virtual social environments” for clients instead, something founder Herman Narula thinks will triple Improbable’s revenue in 2022 to more than $100m and has caught the eye of Romanian-based blockchain technology company Elrond.
In April, Improbable raised £150m from SoftBank and Andreessen Horowitz to build M2 (M squared), a metaverse platform which provides companies the tools to build their own virtual worlds.
“We are now a financially sustainable business with a really interesting growth rate because we found product-market fit in a new sector,” Narula, who expects operational profit to follow in 2023, told the Financial Times.
“We are excited to invest and build together, at a critical time when the value and utility of the metaverse are being defined and shaped,” Beniamin Mincu, founder and chief executive of Elrond added.