MelodyVR Burned Through $14.7 Million in Cash Last Year

MelodyVR has published its financial results for 2018.

Thanks to content sales and partnership deals last year, the virtual reality startup reported £1.2 million ($1.6 million) in revenue.  Yet, underscoring the VR industry’s sustained unprofitability, MelodyVR also reported an operating loss of £11.3 million ($14.7 million).

The company attributed the huge loss to an “increased investment” in people and operating capabilities.

Before costs, the company – a subsidiary of EVR Holdings – successfully raised £20 million ($26 million) last year after issuing new shares.  MelodyVR finished 2018 with an excess of £19 million ($24.7 million) in cash and cash equivalents.  The startup will use this money on future expansion and development.

Though the company proudly boasted its inaugural livestream event, which featured One Direction former member Liam Payne, it only managed to rack up about 127,000 views.  Underscoring the startup’s poor audience engagement and reach, this event was broadcast in 36 countries on both the MelodyVR platform and Facebook 360.

Spinning the low viewership, the startup wrote,

Delivering this first-of-its-kind high resolution VR content in real-time, in addition to the recorded content available via [our] existing music library, provides significant opportunities for revenue generation and will continue to drive awareness of [our] services, as well as providing ever more immersive engagement for fans and music lovers alike, on a global basis.

According to Anthony Matchett, MelodyVR’s Executive Chairman, the livestream illustrates “significant consumer appetite for [our] content.”

Revealing MelodyVR’s long-term strategy, he added that the startup is now targeting “the 1 billion plus smartphone devices around the world.”  This, Matchett adds, will eventually lead to mass market appeal.  The startup’s measured expansion has apparently allowed MelodyVR to conserve valuable cash resources, preserve agility, and capitalize on its “first mover advantage” in virtual reality, which he describes as a “young and embryonic industry.”

Ultimately, the success of our model will depend on our ability to scale.

We’re reassured by the experiences of those who have already experienced our immersive content and are confident that given the right access, awareness, and availability of our content, user numbers, and the quality of engagement will deliver profitable growth.  We’ll, therefore, continue to invest in key marketing and product initiatives, to accelerate reach and believe that at scale we will benefit from substantial revenues and improved margins.

MelodyVR’s 2019 plans include unveiling new advertising products, new mobile apps, an enhanced website, and making improvements to its content delivery services.

It remains unclear how much money the startup will burn through this year — and how much runway remains.


Featured image by Fiona McKinlay (CC by 2.0).