Editor’s note: This article was first published in March 2014, the week the deal was announced. Luckey’s age (21), the 75,000 headset orders, Google’s work on smart glasses and Apple’s on smartwatches, and the open question of how Facebook would profit are all from then. Luckey left Facebook in 2017.
Palmer Luckey has become another case of a college dropout who struck it rich by selling his virtual reality company, the maker of the Oculus Rift. The buyer is Facebook, which has paid no less than $2 billion, made up of $400 million in cash and 23.1 million Facebook shares.
Palmer Luckey, who is currently 21, decided to drop out of college to shape this project with the help of several co-founders (Brendan Iribe, Andrew Scott, Michael Antonov…). They looked for funding on the crowdfunding platform Kickstarter, asking for $255,000 to manufacture a few hundred units. But backers embraced the idea so enthusiastically that the team reached the $255,000 in just 4 hours and ended up raising more than $2 million.
In June 2013, Oculus VR obtained $16 million from several investors, who in return got a seat on the company’s board. The company looked set for a great future, so investors kept coming on their own, eager to take a seat in the business’s success.
The 75,000 orders for virtual reality headsets must have caught Facebook’s attention as a way to bring this technology to other areas of communication and entertainment. The social network has probably decided that the future of social platforms may lie in virtual reality, and not only for games but for the way users communicate with one another.
With Google working on smart glasses and Apple developing smartwatches, Facebook didn’t want to miss the chance to think about social platforms that are… smart? Only time will tell how Facebook will make its $2 billion purchase pay off.
Further reading
Featured image: Dcoetzee, CC0 1.0, via Wikimedia Commons.
