VR startups face new reality of U.S. market access

COVID drives surge in demand for virtual reality technology, but complicates expansion

Immersive Tech team testing the Vancouver company’s virtual technology products | Chung Chow

One man’s shipping container is another man’s spacecraft.

Inside a Gastown facility, crews at Immersive Tech (Fantasy 360 Technologies Inc.) are at work perfecting the company’s first virtual reality experience that unfolds within a converted shipping container.

Instead of standing still in one’s living room, users who don headsets for what the company calls its Uncontained VR attraction will be hit by blasts of air as they navigate across moving floors and interact with physical objects while journeying to a space station.

While Immersive Tech’s first destination is interstellar in nature, CEO Tim Bieber said its next destination is the U.S. market, where it aims to deploy the VR containers at family entertainment centres by this summer.

“Like any Canadian startup, [we] look to the U.S. because it’s just a larger market,” said Bieber, who aims to sell the VR containers for around US$250,000 each.

“Anybody that can, I think, sustain an operation at scale in Canada, that’s fantastic, and I wouldn’t necessarily say don’t. But it’s just an easier path to look to the U.S. and look to export.”

Bieber finds the U.S. market particularly enticing because of looser restrictions in many states on visits to family entertainment centres and other tourist attractions.

But border restrictions during the pandemic have complicated those global aspirations for West Coast extended reality (XR) firms like Immersive Tech.

Before expanding into VR, the Vancouver-based company had to deliver an escape-room unit to a customer in the Virginia, which meant the Canadian installer had to deal with quarantining as a result of the international travel.

“It was just a bit of an extra logistical hassle and expense,” Bieber said.

The company is now building out its U.S.-based sales team and recently hired Steven Dooner, whose career has spanned everything from Chuck E Cheese launches to the expansion of Tokyo Disneyland, as its director of franchise development.

Meanwhile, other B.C.-based XR firms are tapping resources south of the border to better compete in the world’s biggest market.

The Washington Technology Industry Association (WTIA) in Seattle began facilitating its first-ever Canadian XR Startup Market Accelerator program this month with backing from Global Affairs Canada and Trade and Invest BC.

The eight-week virtual program features a mix of workshops and mentoring for 10 Canadian startups – four of which are based in B.C. – looking to expand their U.S. footprints.

“COVID times have been sort of like a blessing in disguise,” said Dhruv Adhia, chief technology officer at Cela Technology Inc.

The Vancouver-based company is known for creating virtual showrooms for brands that allow customers to see if a couch would work in their home or if a pair of shoes works with their fashion sense.

With more consumers eschewing malls for online shops, Cela has been experiencing a surge in interest in its technology at the same time border restrictions have made it more challenging to break into foreign markets.

But Adhia said the accelerator program has served as a link to the U.S. market after only a few weeks.

“The purpose is to help Canadian companies quickly grow their network in the U.S., and that means they need to meet relevant companies, they need to learn the basics about operating in the U.S. and they need to have a network of, typically, private equity in the U.S. in order to be successful in deploying an operation in the U.S.,” said Michael Schutzler, CEO of the WTIA.

The accelerator sprung from a similar program the WTIA developed for South Korean startups.

While Canada and the U.S. share more cultural similarities, Schutzler said Canadian startups need a deep understanding of the lay of the land in the U.S. if they want to be successful.

“The U.S. marketplace is different than the Canadian marketplace. Different consumer applications, there are a lot of regulations here that you don’t have … there’s a lot of education required. It’s not just about professional networking. It’s very specific directed mentoring, education and introduction,” he said.

“There are radical differences between how small businesses operate, depending on which part of the U.S. you operate in. And how to navigate that, how to design your product, how to adjust your marketing, how to adjust the pitch, so to speak, in all of those different regions requires a fair bit of knowledge and training. And that’s true for any company, whether you’re from Korea or Canada or Germany.”

For Kahlil Ashanti, the American founder and CEO of Vancouver-based Weshowup (Seets Technologies Inc.), the accelerator is of particular benefit for his Canadian employees.

His company’s technology creates photorealistic immersive retail experiences.

So rather than sitting in on a Zoom session with a sommelier, users can use their mobile device to recreate the experience of walking into a winery to chat with others and make purchases while at home.

“They [Weshowup employees] see what I’ve been talking about all along: it’s OK to be forward thinking and aggressive and ambitious. You don’t have to be so polite all the time,” said Ashanti, who’s lived in Vancouver since 2007.

“You know, so that that’s really wonderful for me, and things do move faster in the U.S. than they do in Canada.” •