By
Tolu Ajiboye
February 9th, 2024
In addition to the metaverse, Improbable attributed the robust financial earnings to a decrease in the cost of hosting large-scale virtual events.
London-based virtual reality startup Improbable has announced a substantial reduction in its losses for the 2022 fiscal year, marking a notable shift in the company’s financial performance.
The company, known for its ambitious work in creating expansive virtual worlds and experiences, reported an 85% decrease in losses compared to the previous year, bringing its losses down to £19 million ($23 million). The positive financial performance can be attributed, in part, to a significant decrease in the cost of hosting large-scale virtual events.
Improbable Pivot to Metaverse Pays Off
In October last year, the company predicted to achieve profitability in 2022 after raising $100 million in an investment round to reach a valuation of more than $3 billion. According to a press release, the firm ended the year with a robust cash balance of £140 million, demonstrating continued support from its investor community.
Founded in 2012, Improbable has been on the mission to continuously build rendering worlds where thousands of users can engage in gaming and interactive experiences. However, in 2022, the company redirected its focus towards the metaverse concept – a digital universe where individuals can work, trade, socialize, and more.
The British company reported an impressive revenue of more than doubling in 2022 to reach £78 million ($95 million), indicating the success of its metaverse pivot.
Herman Narula, the company’s CEO, described the financial performance as the firm’s most successful financial year to date, highlighting the vindication of their bet on the metaverse.
“Today showcases how far we have come and validates our metaverse focus, yet there is still so much to go after for this business. Opportunities abound in sports, entertainment, and music. Our proprietary technology can take fan engagement and experiences to a new level, and we gather ever more users excited by new experiences happening in the metaverse,” said Narula.
Improbable Projects Continued Decline in Large-scale Event Expenses
In addition to the metaverse, Improbable attributed the robust financial earnings to a decrease in the cost of hosting large-scale virtual events.
Improbable said it expects the cost of these events to continue decreasing, and previously, hosting such events required investments of millions of pounds. Still, technological advancements have significantly lowered this cost to hundreds of thousands of pounds, playing a pivotal role in reducing losses.
So far, the company has conducted 22 online events in the past six months. However, Improbable aims to host up to 300 virtual events next year thanks to its new operating model, which has become leaner and aims to enhance its capabilities for delivering content at scale.
Throughout the year, the company underwent significant changes, including divesting two game studios and selling off a unit of its business that was focused on battlefield simulations for the defense sector to focus on its metaverse journey.
Improbable Partners Yuga Labs and MLB for Metaverse Opportunities
The company has also clarified its brand mission as a venture builder that utilizes its own backbone technology to create new ventures. The company has restructured its operations into three primary areas: metaverse technology development, metaverse worlds, and experience building, and metaverse venture building.
The company’s metaverse strategy has also garnered significant attention, particularly within the digital asset sector, where it has formed notable partnerships, including one with Yuga Labs.
Backed by SoftBank, the British company also struck another deal this year with Major League Baseball (MLB) to introduce a new virtual ballpark that offers fans immersive experiences, digital games, and online event space.
In April, the company raised $150 million for its separate entity “MSquared,” a network of interoperable Web3 metaverses. The new venture aims to offer accessible metaverse experiences through cloud streaming, eliminating the need for software downloads.