Immersed is offering equity in a $60 million priced round. This is an extremely high price for this stage of the company’s development. Immersed generated only $38,000 in revenue last year, and the company’s technology is neither patented nor particularly defensible. Immersed’s high valuation is undoubtedly due to the company’s prior fundraising history from top-tier venture capitalists like Techstars. While the backing of these notable investors lends credibility to the company, these rounds have driven up Immersed’s valuation to a price that is unreasonable for most crowdfunding investors. Therefore, Immersed’s price rating is very low.

Immersed’s current market is quite small given the low level of virtual reality headset adoption. As of last year, just 26 million consumers worldwide owned virtual reality headsets. That’s a very narrow addressable market, particularly given that Immersed only makes money when people are passionate enough about working in a virtual environment to pay for the app. 

However, the company’s future addressable market is a different story. The global virtual reality market was valued at $15.8 billion in 2018. That’s fairly small, but its projected 18% CAGR could really turn investors’ heads. Immersed is playing in a rapidly growing market. Investors should also note the growth in business collaboration tools. The global team collaboration software market was valued at $13.4 billion in 2019 and is also growing rapidly at a projected 13.2% CAGR. Companies feel an urgent need to solve problems related to remote work, and Immersed is well-positioned to tackle the challenge and tap into this growing category. Thus, the company’s market rating is strong.

Immersed founder and CEO/CTO Renji Bijoy graduated from Emory University with a BS in mathematics and computer science. He subsequently earned a master’s degree in computer science from the Georgia Institute of Technology. He worked for a couple of years as a software engineer for three technology companies before founding Immersed. Since starting the company and leading it through Techstars, Bijoy was named to Forbes’ “30 Under 30” list in the consumer technology category. 

Bijoy appears to be the only executive at Immersed, but the company employs a number of engineers and technologists to bring the virtual reality software to life. These team members have impressive backgrounds, with tenures at startups backed by Y Combinator, Andreessen Horowitz, Google, Microsoft, and more. 

Overall, the Immersed team seems very qualified to build a virtual reality platform. However, the team includes only a few non-engineers. There’s no senior talent to handle sales, marketing, operations, or finance, which are increasingly critical needs as the company continues to scale. Based on Immersed’s lack of non-technical talent, the company’s team score is only slightly higher than average.

Immersed offers a truly impressive product that seems to embody the future of work. That’s not a surprise given the depth of technical talent on Immersed’s team. The company seems to have moved quickly to snap up virtual reality (VR) engineers and other technologists who have rapidly built a feature-rich virtual environment that is well-suited for individual remote workers and remote teams alike. There is a good deal of competition in the business collaboration space. A number of companies trying to build remote collaboration rooms, virtual whiteboards, better videoconferencing, and more have emerged in the last year. However, Immersed seems to be building a product that’s a step above most of these. While many other companies are essentially building a slightly different version of Zoom, Immersed is imagining a much more revolutionary future of virtual reality work. 

It should be noted that Immersed hasn’t built an incredibly defensible product (the company doesn’t hold any patents on its VR software), and there are likely many ambitious engineers and prospective founders gunning to create similar platforms. However, it took a large amount of capital for Immersed to hire the engineers to build its product, so competitors wouldn’t be able to replicate the company without significant time and investor backing.

Immersed offers a well-differentiated and at least somewhat defensible product that seems to have the potential to revolutionize remote work. That’s why the company’s differentiation score is its highest.

Immersed is still an early-stage company, and it hasn’t quite reached product-market fit yet in terms of monetization. Immersed generated just $38,000 in revenue in 2020, up from $6,000 in 2019. That’s not revenue worth writing home about. The company is also deeply unprofitable. Immersed’s 2020 net loss was almost $1 million, even larger than its 2019 net loss of roughly $469,000. 

However, there are a couple of key reasons to be optimistic about Immersed’s performance. While the company is losing money, its burn rate isn’t as worrisome as that of other high-tech companies. A net loss of $1 million last year isn’t too bad, particularly given that the company’s margins will be extremely high when it begins generating more revenue. The company is also well-capitalized with investment from leading venture capital (VC) firms. Those investors will undoubtedly continue to provide Immersed with the funding it needs to build a superior product. 

While Immersed’s financial performance hasn’t been stellar thus far, the company seems well-positioned to follow the traditional high-tech startup path: Burn lots of VC money in the early years to develop a highly differentiated, competitive software product, then sit back and watch as the product generates strong monthly recurring revenue at high margins. Therefore, Immersed’s performance rating is strong.

Immersed’s riskiest factor is its timing. With its strong solution for collaboration among remote teams, the company is solving a critical problem for enterprises worldwide in the wake of COVID-19. However, very few people currently own virtual reality headsets. Immersed’s future is highly dependent on increased adoption of virtual reality devices, which will probably take years. It’s unclear if the company can carry on without generating meaningful revenue while it waits for more widespread adoption. 

Immersed also has team and financial risk. While Immersed has a top-tier technical team, the company currently employs very little non-technical talent. While developing a product is critical, it’s also critical to market and sell the product to prospective buyers in order to generate revenue. Financially, Immersed isn’t posting great figures. With less than $50,000 in revenue last year and a $1 million net loss, investors could reasonably question whether Immersed can survive until virtual reality takes off.

Immersed has been around for four years. In that time, the company has graduated from top-tier venture capital firm Techstars and raised $4 million, and its founder was named to Forbes’ 30 Under 30 list. However, investors could be right to question whether these signals truly matter. Despite all the buzzy accolades and apparently meaningful progress, the company hasn’t really hit its stride yet. Immersed has generated less than $50,000 in revenue over four years of operations, and it burned through a million dollars last year, mostly paying the salaries of a large team of technologists.

Immersed is a bit of a moonshot. A virtual reality workspace could be the future of workplace collaboration, but it could also be unprofitable technology ahead of its time given that very few people today own virtual reality headsets. Immersed’s prospects are highly speculative, and investors might not be able to tolerate that amount of risk at this extremely high valuation.

Immersed hasn’t yet found its product-market fit, and the company’s financials aren’t too pretty. However, an investment in Immersed is a bet that remote work needs to be fundamentally reimagined, and there are strong tailwinds that support that vision. The shift to remote work happened very fast last year, and now employers and employees are wondering how to be productive in a future that contains much more remote work than anyone anticipated. Companies spend billions of dollars per year on collaboration tools. Look no further than the blockbuster success of Slack and Zoom to see that enterprise collaboration software is valuable. Combine the potential of a revolutionary productivity and collaboration tool with general excitement around virtual reality, and Immersed could become a leader in defining the future of work.

Immersed is building a virtual reality work environment to help remote workers maintain productivity and seamless collaboration. The company is tapping into key emerging markets: remote work collaboration tools and virtual reality. Immersed has a world-class team of technologists building its product, and the company has been backed by mainstream venture capital firms like Techstars. 

On the other hand, Immersed hasn’t generated any meaningful revenue in its four years of existence, and few people own the virtual reality headsets necessary to use the company’s product. With no proof of its product-market fit and a $60 million valuation, this might not be a reasonable bet for the average investor. Therefore, Immersed has been rated a Neutral Deal. 

For questions regarding the KingsCrowd staff pick or ratings for this company, please reach out to support@kingscrowd.com.