A FAMOUS VR COMPANY IS GOING BANKRUPT IN THE USA

The Sandbox VR Сompany, which specializes in production of the location-based arcade games, has announced its intention to file for a bankruptcy protection in the United States. A successful startup has become a victim of the business disruption caused by the pandemic.

Previously, the company managed to attract the investments from Justin Timberlake and Katy Perry. Now, however, the out-of-home gaming business has become one of the worst hit by Covid-19.

In the United States, Sandbox VR is operated by a subsidiary of Glostation USA Inc., on a behalf of which a bankruptcy petition was filed in the Woodland Hills (California). The company operates not only in the United States, but also in Asia, hosting branded content (for example, Star Trek: Discovery experience) and virtual games developed by the startup employees. The consumer experience itself is typically designed for 20 minutes of play time and can include up to six players in a single session.

The company's CEO Stephen Zhao stated that the bankruptcy was caused by the company's long shutdown due to the pandemic.

Back in early June, he told reporters that the company had almost completely lost profitability and was forced to lay off about 80% of its employees. In particular, a number of leading developers, including the former CEO, have left the company.

Since its foundation in 2016, the startup has raised over $ 80 million in external funding. In addition to Justin Timberlake and Katy Perry, the company was supported by Orlando Bloom and Will Smith. Funding for the development of the startup was provided by the leading investors (for example, Floodgate Ventures, Triplepoint Capital and CRCM), technology companies (Alibaba) and educational institutions (Stanford University).

According to experts, even before the start of suspension of the operations due to the threat of the spread of coronavirus infection, the company was close to receiving about $ 50 million in funding from the shareholders.

However, the situation faced by the company in March 2020 thwarted the Sandbox VR's plans to open about twenty new localizations.

Nevertheless, according to the representatives of the company, it managed to reach an agreement with the creditors on the restructuring of debt obligations and the possibility of restoring the work of its branches as soon as life comes back to normal. However, how quickly this "normal" time will occur, the company is unable to say now.