London-based virtual reality (VR) startup Improbable Worlds Ltd has closed a $502 million Series B round led by SoftBank Group Corp that also sees participation from existing investors Silicon Valley venture capital firm Andreessen Horowitz, Hong Kong-based Horizon Ventures and Singapore state investment fund Temasek Holdings.
The latter three investment firms participated in a $22 million Series A investment round in the VR startup in March 2015.
Improbable Worlds creates virtual worlds for gaming and massive-scale simulations. According to Crunchbase data, aggregate equity funding raised with this round by Improbable is $524.09 million.
According to details in a Bloomberg report, the valuation at which the Series B round was raised is undisclosed. But Softbank’s acquisition of a non-controlling stake suggests a post-money market capitalisation of $1.04 billion at the minimum.
The deal will see Deep Nishar, a managing director of Softbank Group International, join its board. In an official statement, Nishar said, ““Improbable is building breakthrough technologies that are becoming vital and valuable platforms for the global gaming industry. Beyond gaming, this new form of simulation on a massive scale has the potential to help us make better decisions about the world we live in.”
Founded in 2012 by Herman Narula and Rob Whitehead, computer science graduates of Cambridge University, their product – designed primarily for game developers – has applications such as modelling transport systems and epidemiology. In December 2016, the firm announced a partnership with Google that saw it offer its product, SpatialOS, for download by the general public.
Improbable enables software developers to build massive and persistent virtual worlds in addition to digital simulations of complex systems such as economies and biological systems. In essence, SpatialOS is a cloud computing service for building virtual worlds and operated on top of the Google Cloud platform.
This latest investment expands Softbank’s exposure to the UK technology sector. It acquired UK-based chip designer ARM Holdings Plc last year in a $32 billion deal. It also comes as SoftBank finalises its $100 billion technology-oriented Vision Fund, which counts limited partners (LPs) such as Apple Inc. and Saudi Arabia. Part of its stake in ARM Holdings is in the Vision Fund.
The last few years have seen Softbank engage in acquisitions and investments that have built a portfolio of assets outside its core mobile communications business. This aggressive investment appetite and expansion into new technology domains is convergent with the long-term business thesis of Masayoshi Son, the founder and chief executive of Softbank.