People

After loan default and asset transfer, The Void's future looks uncertain

The location-based VR pioneer lost Disney as a key partner earlier this year.

People wearing VR headsets

Multiple industry insiders told Protocol that The Void had been trying to secure more funding throughout the year. It appears that those efforts failed.

Photo: Veronique Dupont/Getty Images

Things are looking grim for The Void, once hailed as the future of virtual reality. The company recently defaulted on a key loan, forcing it to permanently transfer its assets, including patents and trademarks, to its creditor, according to documents reviewed by Protocol. Its financial troubles also led to Disney terminating a longstanding partnership, which means that The Void won't be able to use some of its most popular VR experiences based on Disney IP anymore.

Jim Bennett, the new owner of the company's assets, confirmed the transaction in a statement provided to Protocol, and said he planned either to sell the assets, or resume operations after the pandemic subsides.

"The context for our actions is that malls were shut down due to the pandemic and it was apparent that they would not be opening up for a while," he wrote. "We had to take control of the assets and inform the relevant agencies that we were taking over ownership and management of the registered IP as part of our business plan."

A spokesperson for The Void did not respond to multiple requests for comment.

The Void operated more than a dozen VR centers across North America, Europe, Asia and the Middle East, with plans to launch a number of additional locations around the world soon. Ticket-paying customers would put on a modified VR headset connected to a special backpack and freely roam across a stage with doors, levers and other physical props that made for more believable immersive virtual worlds. Some of the experiences shown were based on blockbuster franchises like "Ghostbusters," "Star Wars" and "Jumanji."

All of those locations had to shut down this spring due to the pandemic. However, the company's financial troubles began long before COVID-19 hit the U.S. Court documents show that the startup was unable to pay for millions of dollars of equipment last summer. At the time, the company's then-CFO promised to pay up as soon as expected financing went through, and thanked the supplier "for being patient," according to one legal filing. The supplier never got its money and sued; the lawsuit ultimately got settled this month.

It's unclear how much money exactly The Void raised since its founding in 2015. Funders included Verizon Ventures, Qualcomm Ventures and James Murdoch's Lupa Systems. Murdoch's VC company wrote two checks for The Void in 2019, according to a person familiar with the transaction. The Void announced a $20 million cash injection from Lupa Systems in July 2019.

The startup underwent some leadership changes in recent months, with former Lululemon CEO Laurent Potdevin assuming the role of the CEO. Potdevin was forced out at Lululemon in early 2018 over an inappropriate relationship with a staff member, CNBC reported at the time.

Documents filed with the U.S. Patent and Trademark Office show that The Void raised debt funding from Bennett in August 2019. To secure that loan, The Void put up its assets as collateral; VR Boom LLC, a company owned by Bennett, was assigned The Void's patents and trademarks as a security interest earlier this year.

That loan, and The Void's apparent inability to pay it back, also seems to have triggered Disney's breakup with the company. Documents posted at The Void's former storefront in Florida's Disney Springs show that Disney terminated its licensing agreement for The Void's "Star Wars," "Wreck-It Ralph" and "Avengers" VR experiences due to a proposed asset transfer to the lender at the end of June. Without the rights to use Disney's IP, the entertainment giant immediately pulled the plug on The Void's leases at Disney's Florida and Southern California properties. A Disney spokesperson declined to comment.

Multiple industry insiders told Protocol that The Void had been trying to secure more funding throughout the year. It appears that those efforts failed: Documents filed with the U.S. Patent and Trademark Office in recent days reveal that the company agreed to transfer "substantially all of [its] property," including key patents and trademarks, to Bennett in October.

The corporate entities used for that asset transfer tell much of the story of The Void's fall from grace: After getting a loan from VR Boom LLC last year, The Void's assets are now being held by a new holding company aptly named VR Exit LLC.

Without Disney's IP, it's unlikely that any reincarnations of The Void would be able to sustain anything close to its original retail footprint and expansion ambitions. The startup had a habit of using prime real estate for its VR centers, with locations including the Grand Canal Shoppes at The Venetian Resort in Las Vegas, the World Trade Center in New York and the Mall of America in Minneapolis.

The Void's chief marketing officer, Jamie Apostolou, told Protocol in June that the company was gearing up to reopen some of these locations with increased safety protocols in place, but also admitted keeping prime real estate with limited attendance wouldn't be easy. "It's going to be a challenge for everybody, ourselves included," Apostolou said at the time.

The startup isn't the only company struggling to take VR to malls and movie theaters amid the pandemic. Competitor Sandbox VR, which had been backed by investors including Will Smith, Justin Timberlake and Katy Perry, filed for bankruptcy in August. Still, some industry insiders believe that location-based VR could reemerge after the pandemic subsides. VR headsets like Facebook's Oculus Quest are growing in popularity, prompting consumers to give the medium another look. At the same time, these headsets will never be able to offer the same level of immersion as VR experiences like the ones shown by The Void.

Bennett echoed those sentiments in his statement. "Given the fact that two companies are moving toward release of Covid-19 vaccines with 90 to 95 percent effectiveness rates we are quite confident that malls will be re-opening and that location-based VR will be back in high demand," he wrote. "Beyond malls, we are looking at a bright future for location-based VR at professional sports venues, concerts etc. This technology is also extremely valuable for training police and first responders."

Policy

Musk’s texts reveal what tech’s most powerful people really want

From Jack Dorsey to Joe Rogan, Musk’s texts are chock-full of überpowerful people, bending a knee to Twitter’s once and (still maybe?) future king.

“Maybe Oprah would be interested in joining the Twitter board if my bid succeeds,” one text reads.

Photo illustration: Patrick Pleul/picture alliance via Getty Images; Protocol

Elon Musk’s text inbox is a rarefied space. It’s a place where tech’s wealthiest casually commit to spending billions of dollars with little more than a thumbs-up emoji and trade tips on how to rewrite the rules for how hundreds of millions of people around the world communicate.

Now, Musk’s ongoing legal battle with Twitter is giving the rest of us a fleeting glimpse into that world. The collection of Musk’s private texts that was made public this week is chock-full of tech power brokers. While the messages are meant to reveal something about Musk’s motivations — and they do — they also say a lot about how things get done and deals get made among some of the most powerful people in the world.

Keep Reading Show less
Issie Lapowsky

Issie Lapowsky ( @issielapowsky) is Protocol's chief correspondent, covering the intersection of technology, politics, and national affairs. She also oversees Protocol's fellowship program. Previously, she was a senior writer at Wired, where she covered the 2016 election and the Facebook beat in its aftermath. Prior to that, Issie worked as a staff writer for Inc. magazine, writing about small business and entrepreneurship. She has also worked as an on-air contributor for CBS News and taught a graduate-level course at New York University's Center for Publishing on how tech giants have affected publishing.

Sponsored Content

Great products are built on strong patents

Experts say robust intellectual property protection is essential to ensure the long-term R&D required to innovate and maintain America's technology leadership.

Every great tech product that you rely on each day, from the smartphone in your pocket to your music streaming service and navigational system in the car, shares one important thing: part of its innovative design is protected by intellectual property (IP) laws.

From 5G to artificial intelligence, IP protection offers a powerful incentive for researchers to create ground-breaking products, and governmental leaders say its protection is an essential part of maintaining US technology leadership. To quote Secretary of Commerce Gina Raimondo: "intellectual property protection is vital for American innovation and entrepreneurship.”

Keep Reading Show less
James Daly
James Daly has a deep knowledge of creating brand voice identity, including understanding various audiences and targeting messaging accordingly. He enjoys commissioning, editing, writing, and business development, particularly in launching new ventures and building passionate audiences. Daly has led teams large and small to multiple awards and quantifiable success through a strategy built on teamwork, passion, fact-checking, intelligence, analytics, and audience growth while meeting budget goals and production deadlines in fast-paced environments. Daly is the Editorial Director of 2030 Media and a contributor at Wired.
Fintech

Circle’s CEO: This is not the time to ‘go crazy’

Jeremy Allaire is leading the stablecoin powerhouse in a time of heightened regulation.

“It’s a complex environment. So every CEO and every board has to be a little bit cautious, because there’s a lot of uncertainty,” Circle CEO Jeremy Allaire told Protocol at Converge22.

Photo: Circle

Sitting solo on a San Francisco stage, Circle CEO Jeremy Allaire asked tennis superstar Serena Williams what it’s like to face “unrelenting skepticism.”

“What do you do when someone says you can’t do this?” Allaire asked the athlete turned VC, who was beaming into Circle’s Converge22 convention by video.

Keep Reading Show less
Benjamin Pimentel

Benjamin Pimentel ( @benpimentel) covers crypto and fintech from San Francisco. He has reported on many of the biggest tech stories over the past 20 years for the San Francisco Chronicle, Dow Jones MarketWatch and Business Insider, from the dot-com crash, the rise of cloud computing, social networking and AI to the impact of the Great Recession and the COVID crisis on Silicon Valley and beyond. He can be reached at bpimentel@protocol.com or via Google Voice at (925) 307-9342.

Enterprise

Is Salesforce still a growth company? Investors are skeptical

Salesforce is betting that customer data platform Genie and new Slack features can push the company to $50 billion in revenue by 2026. But investors are skeptical about the company’s ability to deliver.

Photo: Marlena Sloss/Bloomberg via Getty Images

Salesforce has long been enterprise tech’s golden child. The company said everything customers wanted to hear and did everything investors wanted to see: It produced robust, consistent growth from groundbreaking products combined with an aggressive M&A strategy and a cherished culture, all operating under the helm of a bombastic, but respected, CEO and team of well-coiffed executives.

Dreamforce is the embodiment of that success. Every year, alongside frustrating San Francisco residents, the over-the-top celebration serves as a battle cry to the enterprise software industry, reminding everyone that Marc Benioff’s mighty fiefdom is poised to expand even deeper into your corporate IT stack.

Keep Reading Show less
Joe Williams

Joe Williams is a writer-at-large at Protocol. He previously covered enterprise software for Protocol, Bloomberg and Business Insider. Joe can be reached at JoeWilliams@Protocol.com. To share information confidentially, he can also be contacted on a non-work device via Signal (+1-309-265-6120) or JPW53189@protonmail.com.

Policy

The US and EU are splitting on tech policy. That’s putting the web at risk.

A conversation with Cédric O, the former French minister of state for digital.

“With the difficulty of the U.S. in finding political agreement or political basis to legislate more, we are facing a risk of decoupling in the long term between the EU and the U.S.”

Photo: David Paul Morris/Bloomberg via Getty Images

Cédric O, France’s former minister of state for digital, has been an advocate of Europe’s approach to tech and at the forefront of the continent’s relations with U.S. giants. Protocol caught up with O last week at a conference in New York focusing on social media’s negative effects on society and the possibilities of blockchain-based protocols for alternative networks.

O said watching the U.S. lag in tech policy — even as some states pass their own measures and federal bills gain momentum — has made him worry about the EU and U.S. decoupling. While not as drastic as a disentangling of economic fortunes between the West and China, such a divergence, as O describes it, could still make it functionally impossible for companies to serve users on both sides of the Atlantic with the same product.

Keep Reading Show less
Ben Brody

Ben Brody (@ BenBrodyDC) is a senior reporter at Protocol focusing on how Congress, courts and agencies affect the online world we live in. He formerly covered tech policy and lobbying (including antitrust, Section 230 and privacy) at Bloomberg News, where he previously reported on the influence industry, government ethics and the 2016 presidential election. Before that, Ben covered business news at CNNMoney and AdAge, and all manner of stories in and around New York. He still loves appearing on the New York news radio he grew up with.

Latest Stories
Bulletins