Backed by leading VCs MathCapital and Same Page Capital, Arlene is a startup raising funds on Republic that is developing an extended reality (XR) platform to lowers the barrier to entry for brands looking to generate immersive experiences.
The Arlene Editor will allow brands to generate immersive 360 and AR experiences simply by filling out a few form fields and uploading the assets, starting from an existing template or generating their own.
Arlene's long-term goal is to build an all-in-one platform for AR/VR/360°, a kind of the Squarespace for virtual reality, allowing companies to create AR/VR/360° experiences through a self-service platform or as a fully managed service.
The company only had $10k MRR entering 2021 when they launched the Republic crowdfunding round. In just a few months, their MRR grew by 300% to $40k, and their team doubled from 4 to 8 employees.
Arlene's clients include companies like Coach, United Imaging, Macy's, and Flowcode.
It's worth noting that at the beginning of 2021, Coach had only used Arlene once to create a VR experience in partnership with Disney and Keith Haring (you can enjoy the experience yourself at this link.)
When I interviewed the founder for the podcast at the beginning of July, he informed me that Coach decided to expand the use of Arlene to Asia and Europe because they've seen major KPIs improvements after their first VR experience—AOV (average order value) increased by 16% resulting in an 8x ROI for Coach, that kept using Arlene again and again.
Below you can see that they created three more VR experiences after that first one.
The partnership will expand to include a new virtual tradeshow (launching in August) and 3D/AR product previews for three other business modalities.
A deep dive into the product
As discussed above, the Arlene Editor allows brands to create immersive 360 and AR experiences simply by filling out a few form fields and uploading the assets.
But let's dive into the product to see exactly what it consists of:
- 3D/AR Product Preview
Companies can use Arlene to create photorealistic product previews that can be previewed virtually or in AR using the user's mobile device camera. These immersive experiences can then be embedded into a company's website/eCommerce.
A company that recently used this service is Wayfair, the $25B publicly traded American eCommerce (NYSE: W) that sells furniture and home goods. Formerly known as CSN Stores, the company was founded in 2002, and its digital platform offers 14M items from more than 11k global suppliers.
They recently used Arlene to create a 3D/AR product preview experience for one of their sofas (you can enjoy it yourself here.) Below is the video where I tested it myself, placing the sofa in my living room :)
Another company that used this service is United Imaging, a medical imaging and radiotherapy equipment maker (that is currently weighing a Hong Kong IPO.) You can try the experience yourself here or look at the video I realized below. As you can see, the 3D/AR also includes animation and informational touchpoints.
- Virtual try-out
Previews also work with wearable goods—utilizing facial recognition, customers can try and buy glasses, hats, or jewelry (This only works with most recent smartphones. For Apple, it is with iPhone X and above.) Here is the experience in partnership with REVO, a sunglasses manufacturer.
- 360° Stores
Another way to integrate AR/VR is to design virtual stores with interactive features, product preview, and integrations into eCommerce. A company that used Arlene to do that is Muttropolis, an eCommerce for premium pet supplies, such as dog collars, beds, feeders, and apparel. Below is the immersive store to try it yourself.
- Virtual Tour
Arlene can also design VR tours for pretty much anything, as the team at ERIEBANK Sports Park did. Below is the virtual tour they have realized with Arlene:
- Social AR
Companies can create branded AR experiences and share them across social media to encourage share-ability and engagement. Social AR filters provide an exciting channel to interact with customers and scale organically with a built-in network effect.
To honor Earth Day 2021, Flowcode partnered with Arlene to drive donations through an animated AR experience. The activation features an interactive globe that users can place into their world and buttons linking to donations at various charities.
The AR/VR/360 Landscape
When I started researching the AR/VR/360 landscape, I immediately realized that it is a significantly fragmented (and crowded) market with many players competing in specific products and verticals.
And some of them are already established. You have Kuula for 360 Virtual Tours, Obsessar for Virtual Stores, Nextech for 3D/AR eCommerce, Roar developing a cloud-based SaaS AR content creation platform, and more.
While all these players focus on specific products and verticals, Arlene is trying to build a self-serve ecosystem like Squarespace for AR, VR, and 360°. The platform is almost finished (they are currently using it for their current clients) and it should be released in September. According to the founder, it just misses the UI required to make it publicly available (pay gates, login mechanics, etc.) Below is a screenshot:
I searched the web to see if someone else was doing the same, but I couldn't find anything. Building a full-stack, self-serve platform for AR/VR/360° will be the company's main competitive advantage and, if they will execute on this and leverage this first-mover advantage, they will be able to build a sustainable economic moat thanks to their tech, and brand awareness.
If you've been an Angel Notes member for some time, you've probably noticed that this investment isn't exactly what I usually look for.
I tend to avoid pre-product companies raising funds on equity crowdfunding platforms. The reason is that if you invest in pre-product companies, you're only investing in a team of people. And unless you know that team REALLY well, unless you have spent a lot of time with them, it's impossible to get a grasp on them through a video or even a call.
So why am I making an exception for Arlene?