Just a few months after Meta unveiled its own VR meeting platform, a startup known for a similar product is hitting the brakes: Spatial, which used to offer AR and VR collaboration tools to enterprise customers, is pivoting to cater to NFT fans and other consumers — a new direction that is powered by a new $25 million round of funding.
However, executives insisted in a conversation with Protocol that the move is not a reaction to Meta’s Horizon Workrooms product as much as prompted by broader market realities. “At the end of the day, there really was no dislodging Zoom or Teams for most work,” said Spatial’s head of business, Jacob Loewenstein.
As part of its reboot, Spatial launched a new website that allows people to start their own avatar-powered events spaces and NFT galleries right from within their web browser. Spatial is also available via mobile apps, and will continue to support VR as well, but is heavily emphasizing its web version as a way to quickly get started with a metaverse-like experience.
“During COVID, we thought: Now's the time everyone is going to buy headsets. But headsets didn't actually necessarily take off,” Loewenstein said. Instead, the company saw its web-based usage surpass headset usage, even among enterprise customers. “In 2020, 60% of our users were in VR. In 2021, 80% of our users are [on the] web and mobile,” he said.
Spatial is not the first company to find the enterprise AR and VR market more challenging than expected. Now-defunct Daqri was looking to sell AR hard hats to the industrial enterprise, only to find that companies were eager to test its hardware in order to paint themselves as innovative, but that field workers didn’t actually care about its product.
There are still plenty of hardware and software makers betting on enterprise AR and VR. However, some now believe that the uptake of immersive computing in the workplace will mirror what happened in the mobile space, with people embracing hardware and services that align with what they do in their spare time.
Case in point: Meta will stop selling dedicated enterprise versions of its Quest headset at the end of this month, and instead allow people to use their regular headsets for work as well.
Loewenstein claimed that Spatial had built a multi-million-dollar enterprise business, but that it saw a lot more traction and growth from consumers using its platform for social and cultural events. “Just looking at the data from these new users, we decided to focus 100% on this new consumer path,” he said.
That path includes the ability to sell NFTs through Spatial art galleries, and eventually turn custom Spatial room designs into NFTs as well. Spatial is taking a small commission on NFT sales, and plans to launch its own NFTs. The company also plans to add portals to other metaverse platforms and offer ticketed events.
In the end, having started out as an enterprise platform did help Spatial refine its service, CEO Anand Agarawala said. “Enterprise users are from all walks of life, [with] all sorts of technical capabilities,” he said. “It really led us to [home] in on a product that is super accessible and easy to use.”
Spatial raised its new round from investors including Pine Venture Partners, Maven Growth Partners, Korea Investment Partners, KB Investment, Mirae, Balaji Srinivasan, iNovia, White Star Capital and Lerer Hippeau. Including this round, the company has raised a total of $50 million.
