Facebook will buy virtual reality company Oculus VR for about $2.2 billion, in its first push into the hardware-technology industry

April 8, 2014 Leave a comment

Facebook to buy virtual reality company Oculus for $2 billion

March 26, 2014 – 11:33AM

Sarah Frier

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Selling up: Facebook will buy Oculus VR for $US2 billion. Photo: Bloomberg

Facebook will buy virtual reality company Oculus VR for about $US2 billion ($2.2 billion), in its first push into the hardware-technology industry.

The deal includes $US400 million in cash and 23.1 million Facebook shares, as well as an additional $US300 million if the acquisition achieves certain milestones, Facebook said in a statement.

Facebook is building its mobile business with acquisitions as the more than 1.2 billion members of the world’s largest social network increasingly use the service through smartphones and tablets. It acquired mobile photo-sharing application Instagram in 2012for about $US700 million, and agreed to buy mobile messaging app WhatsApp, which has 450 million users worldwide, for about $US19 billion in February.

The deal pushes Facebook into the wearable technology market where it will compete with Google’s internet-connected eyewear, Google Glass.

In addition to gaming, the Oculus product could become the basis of a communications platform, letting people watch games courtside, consult with doctors or take online courses, Facebook chief executive Mark Zuckerberg said.

“Mobile is the platform of today, and now we’re also getting ready for the platforms of tomorrow,” Zuckerberg said in a post on his Facebook page. “Oculus has the chance to create the most social platform ever, and change the way we work, play and communicate.”

Zuckerberg said that as of last week, more than 1 billion people are actively using Facebook’s mobile apps. He also labelled the social network’s recent spate of acquisitions as out of the ordinary, saying it “will certainly not continue”.

Oculus has raised more than $US91 million, including a $US75 million round led by Andreessen Horowitz in December and $US2.5 million of pre-orders from a campaign on crowdfunding website Kickstarter in 2012.

The Oculus team met with Facebook executives a few months ago in Southern California, and discussions evolved into “an even deeper vision of creating a new platform for interaction that allows billions of people to connect in a way never before possible”, Oculus said in a blog post.

 

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Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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