Facebook made a rather surprising announcement on Tuesday when it revealed that it had purchased Oculus VR, the company behind the Oculus Rift, for $2 billion.
While the move may seem unexpected for many, including the device's Kickstarter backers, an early investor says the acquisition couldn't have come at a better time.
Santo Politi, the founder of Spark Capital which co-led a $16 million round of Series A funding for Oculus VR in June, says Facebook expressed interest after the virtual reality company closed its second round of funding. In December, Andreessen Horowitz led a $75 million round of Series B funding for Oculus VR, which included "significant" additional investment from Spark Capital, Matrix Partners and Formation 8.
"Facebook came knocking after the second round of financing," Politi told Business Insider. "Just like everyone else that had seen the product, he [Facebook CEO Mark Zuckerberg] fell in love."
Oculus VR raised $2.4 million through Kickstarter in September 2012, far surpassing the $250,000 it had hoped for. The Oculus Rift had been marketed as a virtual reality headset for video games during its original campaign, but Oculus VR had always planned to do much more, according to Politi.
"The company always had in mind that this was going to be a mainstream product," he said. "Facebook coming in doesn't change it."
According to a blog post from Zuckerberg, Facebook plans to "accelerate" Oculus' plans to encourage immersive gaming, but also wants to expand virtual reality to broader use cases. Politi offered some theoretical use cases explaining how Facebook could work with a device like the Oculus Rift. For example, rather than logging in to a computer, Facebook users could put on their Oculus Rift and chat with friends virtually, becoming completely immersed in their environment.
There's been much discussion about how Facebook could integrate with Oculus VR's technology, but there's also a large opportunity for Oculus VR to benefit as well, Politi says. Typically, a platform would need to amass millions of users before big-name developers are interested in creating apps for that ecosystem. Facebook could address that concern, according to Politi.
"Facebook has billions of users, and if only a subset of those adopted this product, it's a huge audience," he said.
Politi also notes that there are other large tech companies interested in working with Oculus VR's technology, and said that there are a "bunch" of partnerships that haven't been announced yet.
"I'm not surprised at all that it happened when it happened," he said. "You can imagine that by some point, Facebook will be all virtual."
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