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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."

Protocol | Fintech

Jack Dorsey is so money: What Tidal and banking do for Square

Teaming up with Jay-Z's music streaming service may seem like a move done for flash, but it's ultimately all about the money (and Cash).

Jay-Z performs at the Tidal-X concert at the Barclays Center in Brooklyn in 2017.

Photo: Theo Wargo/Getty Images

It was a big week for Jack Dorsey, who started by turning heads in Wall Street, and then went Hollywood with an unexpected music-streaming deal.

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Benjamin Pimentel ( @benpimentel) covers 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 Signal at (510)731-8429.

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The future of computing at the edge: an interview with Intel’s Tom Lantzsch

An interview with Tom Lantzsch, SVP and GM, Internet of Things Group at Intel

An interview with Tom Lantzsch

Senior Vice President and General Manager of the Internet of Things Group (IoT) at Intel Corporation

Edge computing had been on the rise in the last 18 months – and accelerated amid the need for new applications to solve challenges created by the Covid-19 pandemic. Tom Lantzsch, Senior Vice President and General Manager of the Internet of Things Group (IoT) at Intel Corp., thinks there are more innovations to come – and wants technology leaders to think equally about data and the algorithms as critical differentiators.

In his role at Intel, Lantzsch leads the worldwide group of solutions architects across IoT market segments, including retail, banking, hospitality, education, industrial, transportation, smart cities and healthcare. And he's seen first-hand how artificial intelligence run at the edge can have a big impact on customers' success.

Protocol sat down with Lantzsch to talk about the challenges faced by companies seeking to move from the cloud to the edge; some of the surprising ways that Intel has found to help customers and the next big breakthrough in this space.

What are the biggest trends you are seeing with edge computing and IoT?

A few years ago, there was a notion that the edge was going to be a simplistic model, where we were going to have everything connected up into the cloud and all the compute was going to happen in the cloud. At Intel, we had a bit of a contrarian view. We thought much of the interesting compute was going to happen closer to where data was created. And we believed, at that time, that camera technology was going to be the driving force – that just the sheer amount of content that was created would be overwhelming to ship to the cloud – so we'd have to do compute at the edge. A few years later – that hypothesis is in action and we're seeing edge compute happen in a big way.

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Citizen CEO Andrew Frame talks privacy, safety, coronavirus and the future of the neighborhood watch.

Citizen added COVID-19 tracking to its app over the summer — but its bigger plans got derailed.

Photo: Citizen

Citizen is an app built on the idea that transparency is a good thing. It's the place users — more than 7 million of them, in 28 cities with many more to come soon — can find out when there's a crime, a protest or an incident of any kind nearby. (Just yesterday, it alerted me, along with 17,900 residents of Washington, D.C., that it was about to get very windy. It did indeed get windy.) Users can stream or upload video of what's going on, locals can chat about the latest incidents and everyone's a little safer at the end of the day knowing what's happening in their city.

At least, that's how CEO Andrew Frame sees it. Critics of Citizen say the app is creating hordes of voyeurs, incentivizing people to run into dangerous situations just to grab a video, and encouraging racial profiling and other problematic behaviors all under the guise of whatever "safety" means. They say the app promotes paranoia, alerting users to things that they don't actually need to know about. (That the app was originally called "Vigilante" doesn't help its case.)

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Digital verification systems could give people the freedom to work and travel. Here's how they could actually happen.

One day, you might not need to carry that physical passport around, either.

Photo: CommonPass

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Several countries around the world have begun to prepare for what comes after vaccinations. Swaths of the population will be vaccinated before others, but that hasn't stopped industries decimated by the pandemic from pioneering ways to get some people back to work and play. One of the most promising efforts is the idea of a "vaccine passport," which would allow individuals to show proof that they've been vaccinated against COVID-19 in a way that could be verified by businesses to allow them to travel, work or relax in public without a great fear of spreading the virus.

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Why the CEO of GoFundMe is calling out Congress on coronavirus

GoFundMe has seen millions of Americans asking for help to put food on the table and pay the bills. Tim Cadogan thinks Congress should help fix that.

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Photo: John Lamparski/Getty Images

Tim Cadogan started his first day as CEO of GoFundMe about two weeks before the pandemic wrecked the world. He knew he was joining a company that tried to help people make extra money. He didn't know his company would become a lifeline for millions of Americans who couldn't pay their bills or put food on the table.

And so after a year in which millions of people have asked for help from strangers on GoFundMe, and at least $600 million has been raised (that number could be as much as $1 billion or more now, but GoFundMe didn't provide fundraising data past August) just for coronavirus-related financial crises, Cadogan has had enough. On Thursday, he wrote an open letter to Congress calling for a massive federal aid package aimed at addressing people's fundamental needs. In an unusual call for federal action from a tech CEO, Cadogan wrote that GoFundMe should not and can never replace generous Congressional aid for people who are truly struggling.

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