Some of the worst affected companies during the COVID-19 pandemic have been virtual reality arcades and other out-of-home VR destinations. As the US subsidiary of the group, Glostation USA Inc., filed for bankruptcy back in August, Sandbox VR, one of the most well-funded in the field, was no exception. It's now come to light that Glostation was reorganized, essentially dragging itself out of the bankruptcy of Chapter 11.
Despite having recently reopened a handful of locations, the damage of staying closed for such a prolonged duration appears to have taken its toll on the company. Sandbox VR CEO Steven Zhao told Protocol back in early June that the company had essentially lost "100 per cent of revenue," which prompted Sandbox to lay off 80 per cent of its employees. Former CEO Siqi Chen and a number of developers from the company have left the firm.
Sandbox has raised over $80 million in external funding since its inception in 2016, with the most recent round led by celebrities such as Justin Timberlake, Katy Perry, Orlando Bloom, and Will Smith. Andreessen Horowitz, Alibaba, Floodgate Ventures, Stanford University, Triplepoint Money, and CRCM have also funded Sandbox.
The organization was close to attracting over $50 million in equity financing before the pandemic lockdown, according to the WSJ. In March, this was put on hold, destroying plans for the business to open about 20 new locations.
Even, Sandbox says it reached an agreement with the lenders of the business to restructure debt and reopen its locations once things get back to normal eventually. Whether in the short term there would be a 'standard' still remains to be seen though. Many VR arcades, such as Hologate, have placed more noticeable cleaning and sanitizing regimes in place that they hope will ease the public back in, but whichever way you cut it it's sure to be an uphill battle.
Update (December 10, 2020): A Sandbox VR representative informs Path to VR that the court-approved reorganization plan of Glostation USA Inc., its US subsidiary, as of late last month, has helped it to emerge from its Chapter 11 bankruptcy, which was filed in August 2020. Sandbox VR tells us that in order to stabilize financials and continue to expand its operations, the company was able to restructure remaining debts.
The California-based Glostation is obtaining funds from parent company Sandbox VR Inc which includes a restructuring sum of $13.6 million of secured debt, according to Bloomberg, to continue doing business.