Last week I caught up again with David Whelan, CEO and founder of AIM quoted VRE, the company behind the ENGAGE virtual reality platform.
Regular visitors to the blog will no doubt be aware that VRE is a familiar subject for me, where along with holding the shares, I have also covered it here a few times now.
In my last piece from just a few weeks back, I mentioned that the company had completed a successful and sizeable raise, which was subsequently followed up by news of a new platform extension launch.
Given that much appears to have been happening at the Waterford based business, the catch up with Whelan couldn’t have come at a better time.
The CEO tells me that he and the team are super excited following the placing as they now have the funds to really market the business which has been and is, building momentum.
In the past, it would appear that they have been constrained, particularly given the seemingly huge opportunity that emerged for ENGAGE with the onset of Covid and the pandemic which followed.
As previously mentioned here, Octopus took part in the placing and Whelan says it is now VRE’s largest shareholder, where having been on board since the early days, it is a big supporter and believer in the story.
Additionally, Aviva which previously had what appears to have been a very small interest has also increased and now sits on a notable 3.38% of the company.
Whelan says that the oversubscribed placing received very strong support as those on board can see the trajectory and numbers coming through, which would appear to bode well for growth and future returns.
The proof of the pudding of course will be when the numbers are announced in due course, but for now, Whelan adds that they have been getting busier and busier where the company having already increased its headcount from last years thirty or so to sixty, is now looking to swell that by a further forty people.
He says that business is accelerating and the company is beating previous revenue records monthly and although he thought there may have been something of a slow down with summer commencing, to date, that hasn’t been the case and he expects a very busy last quarter.
Touching on the HTC relationship he confirms that this remains very much on track and that VRE had been waiting for the launch of the former's VIVE focus 3 headset.
The focus here from VRE’s perspective will be the education and enterprise market place with the launch in China being followed up by ROW territories.
The CEO also not surprisingly endorses a wider held view that things across the business environment will never go back to what they were pre-Covid and the attraction of hosting corporate events in a virtual format increasingly has a number of notable attractions.
He also believes that beyond the pandemic driven interest, the impending and increasing focus on businesses reducing their carbon footprint will also play a key part in adoption of VR platforms such as ENGAGE, which is perfect for bringing large groups together in an attractive format remotely.
Beyond the current revenue streams though VRE is already looking to the future and another aspect of its offering, this being ENGAGE Oasis metaverse.
Whilst that understandably sounds somewhat futuristic, it is nevertheless something Whelan believes will provide the company with a further significant and major opportunity ahead and there is plenty of highly respected media comment out there covering this field that would appear to echo his view.
A metaverse put quite simply is a collective shared area/s in a virtual reality format that provides for the bringing together of individuals or groups beyond boundaries and at scale with people represented by avatars.
In VRE’s case the focus is to be across business and commerce centred on a VR version of a large city such as London where offices and retail outlets exist side by side and where individuals or companies can meet, engage and trade.
There are already such platforms in place serving gaming and child centred themes that are proving extremely successful and Whelan believes the area that VRE is targeting provides a significant opportunity for the company.
Importantly, whereas the aforementioned at present typically generate circa $10.00 per user per year via the subscription model, Whelan says that their focus on the likes of major businesses where interaction and transactions can take place, would generate numbers closer to $300 per year.
Although it appears early days as yet, the CEO says that they have been working on the platform for some time now and 80% of it is complete.
VRE hopes to launch Oasis early next year and Whelan says that they can see it going really big and quickly too.
Once more, proof of the pudding will of course be in delivery of the numbers, although with serious Institutional investors buying into the story and the CEO sounding a very confident note on the prospects, then on a personal note for now I am happy to stick with the story and add as the business shows evidence of de-risking.
News should continue to flow as the year progresses, although Whelan says that they will only release relevant or meaningful items such as collaborations or progress updates as has been the case to date and not trot out meaningless news that can rightly be viewed with suspicion.
The shares are currently 18.75p valuing the business at £54m which arguably and understandably for many bystanders may look up with events given the revenue announced in the last set of results.
However, as with many successful growth stocks, investors are often prepared to pay a premium for future success, so if VRE can both demonstrate and deliver in the near to medium term, then the shares could have a long way to go yet.
Keeping a close eye on that progress will be paramount from an investment perspective, along with any indication of others of note buying into the company, as such situations often attract the attention of a larger player.
Although much at present is unknown or remains speculative, such as the impending ENGAGE China related revenues commencing, along with the subsequent launch of Oasis, the current prospects continue to both sound and look positive, with momentum seemingly building and continuing on the right track.
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