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."

Fintech

The crypto crash's violence shocked Circle's CEO

Jeremy Allaire remains upbeat about stablecoins despite the UST wipeout, he told Protocol in an interview.

Allaire said what really caught him by surprise was “how fast the death spiral happened and how violent of a value destruction it was.”

Photo: Heidi Gutman/CNBC/NBCU Photo Bank/NBCUniversal via Getty Images

Circle CEO Jeremy Allaire said he saw the UST meltdown coming about six months ago, long before the stablecoin crash rocked the crypto world.

“This was a house of cards,” he told Protocol. “It was very clear that it was unsustainable and that there would be a very high risk of a death spiral.”

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.

Sponsored Content

Foursquare data story: leveraging location data for site selection

We take a closer look at points of interest and foot traffic patterns to demonstrate how location data can be leveraged to inform better site selecti­on strategies.

Imagine: You’re the leader of a real estate team at a restaurant brand looking to open a new location in Manhattan. You have two options you’re evaluating: one site in SoHo, and another site in the Flatiron neighborhood. Which do you choose?

Keep Reading Show less

A DTC baby formula startup is caught in the center of a supply chain crisis

After weeks of “unprecedented growth,” Bobbie co-founder Laura Modi made a hard decision: to not accept any more new customers.

Parents unable to track down formula in stores have been turning to Facebook groups, homemade formula recipes and Bobbie, a 4-year-old subscription baby formula company.

Photo: JIM WATSON/AFP via Getty Images

The ongoing baby formula shortage has taken a toll on parents throughout the U.S. Laura Modi, co-founder of formula startup Bobbie, said she’s been “wearing the hat of a mom way more than that of a CEO” in recent weeks.

“It's scary to be a parent right now, with the uncertainty of knowing you can’t find your formula,” Modi told Protocol.

Keep Reading Show less
Nat Rubio-Licht

Nat Rubio-Licht is a Los Angeles-based news writer at Protocol. They graduated from Syracuse University with a degree in newspaper and online journalism in May 2020. Prior to joining the team, they worked at the Los Angeles Business Journal as a technology and aerospace reporter.

Enterprise

Celonis vows to stay independent despite offers from SAP, ServiceNow

Celonis is convinced standalone mining vendors can survive. But industry consolidation paints a different picture, and enterprise software giants are circling.

Celonis CEO Alex Rinke turned down offers from ServiceNow and SAP, according to sources.

Photo: Celonis

For the past decade, any software vendor that touted new levels of automation and data-driven insights appeared to have seemingly unrestricted access to capital. Now, as valuations drop and fundraising becomes more difficult, founders and company leaders are facing a difficult decision: look to be acquired or try to go it alone.

At Celonis — which, at an $11 billion valuation, is one of the buzzier software upstarts — that question appears to have already been decided. Enterprise software giants ServiceNow and SAP made offers in the past year to buy the process-mining firm, according to sources familiar with the deliberations, which were turned down because the Celonis leadership team wanted to remain independent.

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.

Enterprise

SaaS valuations cratered in early 2022. But these startups thrived.

VCs were still bullish on supply chain, recruiting and data startups despite the economic environment that chopped the valuations of newly public companies and late-stage enterprise startups.

While private equity has been investing in enterprise tech for decades, the confluence of several trends in the sector is making it more competitive than ever before.
Image: Getty Images; Protocol

Despite a volatile tech stock market so far this year that has included delayed IPOs, lowered valuations and declining investor sentiment, a few enterprise tech categories managed to keep getting funding. Data platforms, supply chain management tech, workplace software and cybersecurity startups all dominated the funding cycle over the past quarter.

When it comes to enterprise SaaS, the number of mega-deals — VC funding rounds over $100 million — spiked last year, according to data from Pitchbook. Partially driven by the onset of a pandemic that accelerated the need for everything from contact centers to supply chains to move into the cloud, the number of large VC deals tripled between 2020 and 2021. That growth has extended into this year, where the number of mega-deals has already outpaced all of 2020.

Keep Reading Show less
Aisha Counts

Aisha Counts (@aishacounts) is a reporter at Protocol covering enterprise software. Formerly, she was a management consultant for EY. She's based in Los Angeles and can be reached at acounts@protocol.com.

Latest Stories
Bulletins