I enjoyed a cracking time in Bournemouth last week with blue skies all the way, culminating with some breaking news from one of my more speculative of investments.
The blue-sky analogy would seem perfectly apt here, as VRE the Irish based developer and provider of the virtual reality ENGAGE platform announced a substantial placing at 16p per share.
The company clearly falls into the more speculative bracket as I have written here before and those that concentrate on the fundamentals of a business would immediately fail to marry the VRE market cap to its current revenue stream.
However, VRE really is all about being in the right place at the right time and particularly just where it may be a few years down the line, as revenues by then could - according to the company - be in the region of ten million euros.
That may sound like another jam tomorrow story which ultimately fails to deliver and of course the danger is, that the ENGAGE platform does indeed fail to cut it.
Evidence thus far though appears to bode well, as take-up and interest is gathering pace in a market that is now, really only scratching at the surface of growth potential.
In raising a significant £7.7m from an oversubscribed placing, VRE has certainly attracted the interest of Institutional investors which sees Octopus, already on board from the early days, and who recently added at a lower level taking part in the placing with a substantial investment.
That appears to be a seriously positive endorsement which goes well with the recent momentum that is building for the company that sees it extremely well placed to ramp up sales, not merely this year but importantly over the longer term.
Although a number of private investors appear somewhat miffed at missing out on the raise which was at a discount to the previous closing price of 19p, I do find it odd that many would exit now.
The new money was in my view always going to be needed at some point and whilst the CEO had previously told me that it wasn’t on the agenda when we last spoke a few months back, I personally welcome the news.
For any business with serious growth aspirations the need for a decent slug of cash on the balance sheet is paramount, particularly when dealing with big players either as customers or partners.
Too often, businesses fail to seize the moment and opt for a sizeable raise by veering for smaller more regular tapping of the market, that often does little to drive growth or support credibility.
VRE right now would appear to have a sizeable opportunity on which to build and expand which could provide for an exciting ride for investors, particularly given its now welcomed strengthened financial position.
In terms of where it is operating, the VR space was valued at $15bn last year and is expected to grow at a CAGR of 18% over the next six years as the rising adoption of various aspects of the space are taken on board across numerous industries.
Without doubt, the onset of Covid and the subsequent pandemic has not only highlighted the benefits of the ENGAGE platform, but has accelerated its awareness which has resulted in the increasing adoption as recently reported by the company.
The association and partnership with HTC as announced last year was perhaps a pivotal point for VRE increasing its profile and that relationship should prove to be a real driver across the Asia region in the coming months and beyond.
Last October HTC launched its VIVE suite which is a bundle of five enterprise-focused VR applications that fall under a single login that offers amongst others education and businesses a range of various VR services.
As part of that, ENGAGE comes under the Sessions category being a multi-platform tool that supports large-scale events and conferences enabling enterprises to host events remotely.
The fact that HTC has used the platform to hold its own major events further underlines the confidence in ENGAGE and prospects for adoption across the Asia region look extremely exciting.
In wake of the pandemic and increasing concerns around climate change the VR market is set to grow exponentially in the coming years with those already in position or well aligned, likely to emerge as real winners.
Further welcome news recently emerged in that the VRE software will also now be bundled within the recently launched Vive Focus 3 XR along with being available on the new HP ProBook laptops that are sold in China, both of which provide for huge sales potential for the company.
The software bundle which allows users to engage and collaborate remotely via the VR headsets is also expanding outside of China, by now being available for purchase in Australia, Taiwan and New Zealand.
VRE could be fast approaching an inflexion point having achieved some key milestones last year that included the launch of ENGAGE mobile on both android and iOS devices.
Additionally, it also enjoyed the official release on Facebook/Oculus Quest Store towards the end of last year and both have increased its exposure and increasing interest from a wider audience.
The company is clearly ambitious and has now set itself what appear stiff targets for the medium to longer term but they are nevertheless achievable in its view.
Further evidence of meeting its goals will no doubt be welcomed by investors and there should, one would hope, be additional news from VRE in the coming months.
For now, however, some may wish to remain on the fence or even avoid until there is more concrete evidence of the company delivering.
That is fair enough, but it is also worth noting that such blue sky opportunities often ascend to dizzy heights on specific deals or delivery of impressive numbers and VRE could well fall into that category, particularly as the VR market continues to grow and seriously cement its position in the market place.