Virtual reality technology startup Oculus VR has reached a deal to be acquired by Facebook for approximately $2 billion, and two Boston-area venture capital firms, Matrix Partners and Spark Capital, are among the investors set to earn a windfall.
The company is the maker of the the Oculus Rift virtual reality headset. Matrix’s investment into Oculus has been led by Cambridge-based general partner Antonio Rodriguez, while Spark’s investment has been led by Boston-based general partner Santo Politi. Spark venture partner Nabeel Hyatt had also assisted with the investment into Oculus.
Irvine, Calif.-based Oculus VR had raised at least $91 million in venture capital across two funding rounds since mid-2013. Matrix and Spark took part in both funding rounds, and had led the Series A round of $16 million.
See related story: Matrix Partners extends winning streak with Oculus sale to Facebook
At the time of the Series A last June, Rodriguez blogged on the opportunity he saw in Oculus: “Many predict that wearables are the next frontier, but most of these devices attempt to coexist with the real world around you … Oculus’ headset, the Rift, brings you directly into a world completely controlled by its combination of hardware and software in a unique way that has been the dream of immersive game makers for decades.”
Rodriguez also posted a blog on the Facebook acquisition here.
Matrix and Spark are no strangers to big wins in the startup investing world: Spark has been an investor in the likes of Twitter and Tumblr, while Matrix’s past investments have included Apple and Netezza.
Facebook said the acquisition deal includes $400 million in cash and 23.1 million shares of Facebook common stock, valued at $1.6 billion. The deal could rise to as much as $2.3 billion if additional milestones are achieved.
“Oculus has the chance to create the most social platform ever, and change the way we work, play and communicate,” Facebook chief executive Mark Zuckerberg said in a news release.
Oculus initially collected nearly $2.5 million on the crowdfunding site Kickstarter.
Scott Kirsner recently donned an Oculus headset to visit a digital version of the Worcester Art Museum.
In the news release, Facebook explained why a social networking company such as itself would buy a virtual reality startup:
Oculus is the leader in immersive virtual reality technology and has already built strong interest among developers, having received more than 75,000 orders for development kits for the company’s virtual reality headset, the Oculus Rift. While the applications for virtual reality technology beyond gaming are in their nascent stages, several industries are already experimenting with the technology, and Facebook plans to extend Oculus’ existing advantage in gaming to new verticals, including communications, media and entertainment, education and other areas. Given these broad potential applications, virtual reality technology is a strong candidate to emerge as the next social and communications platform.
The full release on the acquisition can be found here.