VR startup Rec Room raises $145M, reaches $3.5B valuation
- ByStartupStory | December 22, 2021
Rec Room, the Seattle-based development studio behind the fast-growing VR application Rec Room, has raised $145 million in new funding, bringing its current valuation to $3.5 billion.
This is Rec Room’s second round of funding in 2021, following a $100 million raise in March that officially catapulted the company into “unicorn” status as a privately-held startup valued at over $1 billion. Coatue Management led the latest round, with participation from existing investors Sequoia Capital, Index Ventures and Madrona Venture Group.
Rec Room’s self-named, flagship application is available on multiple platforms in both 2D and VR formats, including PC, Oculus, mobile devices, Xbox, and as of Dec. 16, the PlayStation 5. Rec Room is a free app described as a “universally accessible online community,” where users create a cartoony virtual avatar to participate in a variety of activities, many of which were designed by the application’s community.
While Rec Room has been available since 2016, when it first arrived on Steam, its community grew dramatically over the course of 2020. During the COVID-19 quarantine, users turned to Rec Room to simulate in-person activities, including school lessons, birthday parties, happy hours, and one-on-one therapy. By Sept. 2020, Rec Room’s userbase had tripled.
Rec Room is among a group of community-based social gaming and entertainment apps that rely on user-generated content and have seen huge upticks in growth during the pandemic. That group includes Minecraft and Roblox, the latter of which is worth $44 billion after going public earlier this year.
“I think it’s the nature of social apps to have a compounding effect,” said Cameron Brown, chief creative officer at Rec Room. “The more people are playing, the more people there are to play with. This means that Rec Room becomes more inviting as it scales, so I think we have that going for us.”
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