Pixar-esque Penrose Studios raises $8.5M, VR’s biggest seed round

When a new medium arises, so too do new brands hoping to stake a claim on the frontier. Penrose Studios wants to be the Pixar of VR, telling heartfelt stories in immersive worlds. And now it has the money to hire the best talent and develop its own in-VR creation tools.

Today Penrose Studios announced it’s raised an $8.5 million seed round led by Accelerate-IT Ventures, and joined by TransLink Capital, 8 Angel, Suffolk Equity, and several angels.

Penrose was founded by Eugene Chung, formerly of Pixar itself and the first head of Oculus Studios, the VR giant’s cinematic content production arm. Along with his employees previously at Oculus, Disney Google, and DreamWorks, Chung plans to build new technologies to make VR stories interactive. He tells me while there are plenty of ideas for VR content, it was his ace team that attracted the big seed round from AITV, a first-time venture fund.

Penrose’s works are already available on the Samsung Gear VR, and will come to Oculus Rift, HTC Vive, and Sony PlayStation VR upon launch. Penrose released its first VR film “The Rose And I” last year, featuring a “Little Prince”-inspired look at a boy living on his own tiny planet where he befriends a sentient flower. Viewers could wander around the world and even peek down into a hole in its surface where the boy hides. Without words, the trepidation, vulnerability, and curiosity of the story come through vividly.

At Sundance, Penrose released a preview of “Allumette”, which will premier at Tribeca Film Festival. Audiences follow the tale of a lonely little girl who sells magical matchsticks in a town floating in the clouds. By making the characters and settings tiny, the viewer feels like an invincible giant, with no worry about leaning in close to the action.

“The characters are conduits to these worlds we want to create” Chung tells me. He believes it’s their identities and designs that will make people fall in love with virtual reality, not just the novelty of the perspective.

While gaming has received much of the fanfare around VR, cinematic experiences like those Penrose makes could appeal to a much wider demographic, similar to the Pixar films enjoyed by kids and parents alike. Penrose could use its newfound cash to secure the best story tellers and build a name for itself before more studios emerge.

If VR truly is the next big computing platform, that first-to-market position could pay dividends for years. Pixar did it with computer-rendered 3D animation on the silver screen. Now Penrose could do it on the initial wave of VR headsets.