“We have a core belief that immersive technology is the future of entertainment, work and life”

– Simon Barratt, co-founder and CEO Cooperative Innovations

By Bernadette Fallon

Immersive technologies studio Cooperative Innovations recently closed a seed funding round of over £500k from a number of sources, including angel investor Craig Fletcher, Ascension Ventures and Trend Investment Group. Next steps for the company include growing the team and launching a pilot licensing programme for Ikabod, the first of its technologies to hit the market.

Founded in 2016 by Simon Barratt and Brian Marshall, Cooperative Innovations draws on the pairs’ background and over 45 years of combined award-winning industry experience including senior level tools, engine and gameplay programming, as well as extensive business and entrepreneurial knowledge.

“We’ve long been fans of virtual and augmented reality,” explains Simon. “Both of us began dabbling in virtual reality back in the 1990s and at our previous studio, Four Door Lemon, we produced three significantly scoped augmented reality games in conjunction with PlayStation in 2012. We both backed the Oculus Kickstarter when it came about, and I met with Palmer Luckey quite a while before things really picked up for them. We knew that this was going to be the time for VR to see its potential finally met after all these years.”

Trying a lot of the early content, the duo felt that multi-user and social experiences were the multipliers that would really elevate the immersion provided by VR to an even greater level. And so they set about designing concepts for games, experiences and applications that rely on multiple people, and since then have focused their technology and content development specifically on these areas.

Their goal for a long time, reveals Simon, has been “to produce bleeding edge high quality content that allows us to demonstrate our technology”.

Challenges to achieving growth

Challenges on the journey since launching the company have included issues with funding; “ultimately funding has been difficult for us in terms of our original content and our technology development,” says Simon.

“Both Brian and I invested a lot of our own funds and ‘sweat equity’ to get things going and to develop our base technologies and concepts. We received some early grant funding but missed out on quite a few opportunities by a small margin during 2017.”

And while both partners had extensive experience in building studios from previous businesses, breaking new ground in the game-changing immersive tech world brings its own challenges.

“We are still inventing a lot of stuff and creating new technologies at the same time, so in terms of building a business there are a lot of things we are experimenting with and learning about. It’s not just about building a studio, we’re also trying to convince people of the benefits of AR and VR, convincing investors that the market will be as big as we all know it will be.”

What helped on the journey?

Immerse UK’s investment readiness bootcamp in association with the Accelerator Network was “incredibly valuable” when it came to perfecting the company’s pitch, understanding their own value and getting a sense of the type of deal they wanted to secure.

“My previous studio was boot-strapped over 10 years to 30 full-time staff and while this was a great learning process, it didn’t give me any insight into the process of fundraising and the way that a company structure is setup with investors on board,” explains Simon. “Investors are looking for different types of information, in terms of the returns they’re expecting to see, the pitch decks, financials and legal structures and the bootcamp was very useful in providing all of that.”

Securing the investment

When it came to approaching investors in early 2018, Simon says they were lucky to be already chatting to a few angels from the games industry such as Craig Fletcher, who were starting to connect up with various investment funds in London, including Ascension Ventures.

“This gave us a direct path for our initial investment offers and through additional events such as Games London Finance Market we were able to meet with a large number of other investors to test our pitch deck and proposition.”

The majority of the work to secure the investment, he reveals, was getting the pitch deck into a suitable state, given that the company’s technology and its applications are very broad. “We managed to get there in the end but ultimately it came down to the process of tweaking based on feedback and how the pitch felt while giving it as we went along. “

And with investment secured, they have been able to expand their team to a diverse 12 full-time staff plus a couple of contractors. The team is currently working on finishing some of Cooperative Innovation’s original games and application projects, while the technology division further prepare the tech products for licensing.

And while recruiting in high tech fields can be difficult, where it’s not always easy to match skill requirement with skill availability, Simon and Brian have brought their own relevant core skills to the market, which means they can also work as mentors to others.

“We’re lucky in that respect – but of course we want to have people working with us who are very experienced and obviously there aren’t that many very experienced people in this market because it’s so new.”

Advice to the industry

Speaking to other players hoping to secure investment in this sector, Simon suggests talking to as many other funded companies as possible and taking advantage of any advice around fundraising – “ensure you are as prepared as possible”.

“Getting the offer and the business model right for the pitch is the vital part and, for us, this is something that took a little bit of iteration internally before we started pitching it. I would also suggest that having a one pager version of your pitch can be useful when looking for investors in the first instance. We didn’t actually end up using one, but it could have been useful for sounding out other investors.”

He points to the Investment Accelerator programme as another great scheme to help connect investors with businesses, one which will certainly help in de-risking the future for both companies and investors. “We’re very good in the UK at problem solving, especially in terms of software, and I feel that this programme can really support companies looking to lead the way,” Simon says.

How do current opportunities in the UK investment market compare globally?

“The SEIS and EIS schemes are absolutely brilliant and I think they’re a huge boost for us versus the global investment market. We’re based in Leeds in Yorkshire and found that a lot of the major investors operated from London as you’d expect. However, in the last six months we’ve seen more activity in the North of England and I think this is really positive for the UK.”

Looking at the current creative scene in the north of England, Simon points to big players in the area such as Channel 4, Sky and Burberry.

“We have the Northern Powerhouse Investment Fund, alongside several other key investors, we have a lot of top creative companies – smart people doing interesting things,” he says.

And while investors put money into employing people in London, he points out that they can do it slightly cheaper elsewhere. “We complete in a global market, so it doesn’t really matter where you are doing the actual work from. From a business person point of view, you end up travelling a lot anyway, so you might have to travel to London for meetings but the team can be based anywhere.”

What does the future look like?

“2019 will see our technology solutions such as our full body Inverse Kinematic system Ikabod, which enables the creation of realistic avatars for social VR/AR purposes, licensed to a wide range of customers,” says Simon. “We’ll also have our original social VR games released to consumers and potentially into location-based entertainment companies.”

“And while we’re currently focused on hitting our 2019 goals, we will likely be looking to raise further funds later in the year to capitalise on the continued VR/AR market growth, our technology and team development plus the huge number of opportunities we see emerging week on week.”

It sounds like the road ahead is looking bright for Cooperative Innovations.

Angel investment, AotF, Audience of the Future, invest, Investment, Investor Accelerator