Speculative Idea: Immersed Virtual Reality
As you can probably gather from a lot of my previous writings including letting you know that along with The Space Revolution, my other favorite Revolution to invest in for the next five to ten years is probably The Virtual Reality Revolution, led by Facebook, which is why I’ve been talking about concept of a “Spacebook Fund“. I am confident that the VR/AR Revolution is going to be a Trillion dollar market. Because of their focus on this revolutionary trend, I made Facebook my largest holding a few weeks ago when it was in the $250s.
Facebook is deadly serious about becoming the first de facto standard platform for the Virtual Reality market. In fact, a recent article reports that Facebook has almost 20% of their workforce focused on this area. As Facebook’s Oculus platform becomes mainstream, it is quickly bringing a critical mass of end users, developers and other hardware suppliers to the market. One of those new entrants to the market is one that I’ve mentioned before because I was so excited about their Revolutionary app for Facebook Oculus Virtual Reality platform. This private company is called Immersed. The Immersed app is focused on the collaborative work environment and workplace productivity markets. Those markets might not sound too sexy, but they are truly Revolutionary. Imagine having your trading screens open on your left side, your favorite financial news channel playing on your left side with a view of planet earth around you. Or sitting around in a virtual coffee shop with your co-workers sharing screens, getting up and writing on a whiteboard, and feeling like you are truly in a room with them all while you are working remotely, like a Zoom meeting on steroids.
They are also working on different ways to drastically increase worker productivity while working alone. Imagine the demand from companies of all sizes for a product that can make their employees more efficient. In addition to these areas, the company and their team of engineers are constantly improving the platform and adding features like being able to type on a virtual keyboard or control your phone in VR. When I mentioned this company in January, I loved the idea but said they we not quite ready for primetime but that they’re getting there. After studying everything I can get my hands on about this company and its competitors (and potential competitors) along with speaking with the founder and CEO, Renji Bijoy, earlier today I am confident that Immersed is positioned as well as they can be at this very early stage. The company’s apps, technology and concept are strong enough they already have a seat at the table of where companies such as Facebook, Microsoft and HTC are guiding this revolution.
Let’s talk valuation. They are raising money at a $60 million dollar valuation. I normally do not like to use Total Addressable Market, but just as an exercise let us see what that gives us. In their investor deck, Immersed sees a TAM of $59 billion (I think totally reasonable) in 2023 spent by enterprise on collaborative work solutions. If Immersed were to capture just 1 percent of that market, it would be $590 million in revenue per year. If we put a 10x price to sales multiple on that we come up with a value of Immersed at $5.9 billion. That is almost a 100x return on your initial investment (which would get diluted some alone the way.) I am not saying that would happen in 2023, but I like their chances of getting to a number like that in the future and the risk/reward of a small investment (understanding that the value of this risky, illiquid investment could go to zero).
Again, this is where an investment in Immersed might not be right for everyone as it is much more speculative in nature than our typical publicly-traded stock. As I mentioned earlier, Immersed is a private company. They currently do not have a lot of revenue and are losing money for now. They face numerous obstacles and very well-funded competitors including in some ways, the biggies like Microsoft, Zoom and Facebook itself. However, if they continue to innovate, continue to gain traction and even get a little lucky, they have the potential of being a huge success. The only way to invest in them right now is through a crowdfunding investment on Wefunder.com (and thank you to the TradingWithCody.com subscriber who brought the fact that Immersed was available as an investment on Wefunder to my attention during last week’s chat).
I’m not even sure at this point that all of us are going to get our orders filled as the site says that it’s “Almost Sold Out”. If you are interested in investing in Immersed, you have to act fast. Their funding round closes on April 2 at 11pm ET. There is a lot of information on the website to help you do your due diligence before deciding to invest. After doing mine, I made both a personal investment and one in the hedge fund. After talking with Renji, I added to it. This is very important so pay attention. Investing in early stage private companies comes with a lot of risk. If you make a investment in a private company, make it a small percentage of your investable assets.
See you in the morning for this week’s Live Q&A chat at 10am ET, in the TWC Chat Room or just email us your question to support@tradingwithcody.com.
