Asian conglomerate-backed venture capital firm Formation 8 is among the investors in line for a lucrative exit from US-based virtual reality gaming company Oculus VR after Oculus agreed to a $2bn acquisition by social networking company Facebook.
Facebook is paying $400m in cash and will provide 23.1 million shares, valued at roughly $1.6bn over the last month. An additional $300m in cash and stock could be provided if Ocular VR passes certain milestones.
Founded in 2012, Oculus is the developer of the Rift, a virtual reality headset that allows users to interact with games in a VR setting.
Formation 8 invested in both the company’s $16m series A round in June 2013 and the $75m series B that followed in December, with other investors including private equity firm Matrix Partners and VC firms Spark Capital, Founders Fund, BIG Ventures and Andreessen Horowitz.
However, the deal has sparked controversy in the gaming community, which made up the brunt of Oculus’ $2.4m crowdfunded seed round in 2012. Many users have expressed disappointment or anger that their four-figure contribution has made the founders so wealthy before the product was fully developed, while some in the business have voiced fears that the progress of the technology could be slowed or diverted into an advertising-focused direction because of the acquisition.
Formation 8 was launched as a venture capital firm in 2013, closing $448m in finance from limited partners including Asian conglomerates Korea Telecom, LS Group, CJ Media & Entertainment.