Japanese virtual live music event platform and metaverse company VARK Inc. has raised 1 billion Japanese yen (approx. USD $7.2 million).
The capital was raised in a series C funding round, the proceeds of which will be used to strengthen the platform’s product development.
The investment was carried out through a third-party allotment of new shares to Chinese video games developer NetEase Games and SBI Investment, in addition to existing investors JAFCO Group, Mitsubishi UFJ Capital and ANRI.
According to data from Crunchbase, VARK has so far raised a cumulative 2.1 billion yen from its funding rounds. VARK’s series B round raised 600 million yen from a group of investors including Dentsu Group.
Tokyo-based VARK was founded in August 2017 as ActEvolve. It started distribution of virtual reality live platform VARK in November 2018 and changed its company name to VARK Inc. in May 2020.
The company, which provides a virtual live music event platform, metaverse templates, and video creation support tools for 3D avatars, counts Meta’s Irish unit among its clients, according to its website.
VARK is also the developer behind Blitz Freak, an online multiplayer VR game.
VARK says it is driven by its vision to “create the best virtual services.” The company has developed businesses such as its namesake brand VARK, which combines a virtual live music event platform and metaverse templates, and VARK SHORTS, a video creation support tool for 3D avatars.
VARK SHORTS has recently garnered over 10,000 users within a few days of its launch, the company said.
Over the past year, the number of virtual live music events hosted on the VARK platform has more than doubled, which the company attributed to its efforts to enhance its product offerings through previous funding rounds.
Additionally, VARK’s metaverse templates have gained traction and have been used in large-scale events like the TV Tokyo Virtual Music Festival, held in collaboration with Dentsu Inc. and TV Tokyo Corporation.
VARK said it will use the newly secured funding to strengthen its product development system, allowing for enhancements to existing offerings and the exploration of new business opportunities, including the expansion of VARK SHORTS using the lean startup method.
“We need at least ten times this amount of funding and more people to help us spread our culture around the world. We need partners outside of Japan as we continue our international expansion next year and the year after that.”
Takuya Kato, VARK
Commenting on the fresh investment, VARK founder Takuya Kato, said: “In Japan, it is often said that raising one billion yen is seed raising, and we believe that is exactly the case in the metaverse field.”
“We need at least ten times this amount of funding and more people to help us spread our culture around the world. We need partners outside of Japan as we continue our international expansion next year and the year after that.”
VARK COO COO Yutaka Sugimoto, added: “It has been about two years since I joined VARK, and I feel that the speed at which products are released and updated has increased dramatically.”
“In order to respond to the support and expectations of our shareholders, business partners, and service users, we will continue to strengthen our product development system and strive to provide value at an even faster pace.”
The investment round comes amid increasing appetite for companies operating in the metaverse and virtual live music event space.
In Japan, virtual personalities like Hatsune Miku and Kizuna AI each boast millions of followers on social media.
Adam Arrigo, CEO and co-founder of digital avatar company Wave, in 2019 said there are “over 6,000 DIY virtual influencers in Japan who know how to use tools like Unity, VRChat and the VRM protocol to build virtual personas of themselves, and then stream to YouTube and embody the character in real time.”
In March, Katsumi Kuroiwa, CEO of Japanese music entertainment company Avex Inc., told MBW that businesses that can offer user experiences that bridge the metaverse and the real world have an edge in the current environment.
“For example, virtual concerts, virtual artists, live experiences incorporating 3D technology, etc. We intend to keep an eye on these movements internationally,” Kuroiwa said.
Music Business Worldwide