Seemingly confident that virtual reality is the next big thing, HTC has taken a bold step by spinning off its Vive VR business into a distinct subsidiary. It is also leading a venture capital alliance that will raise $10 billion for investment in virtual reality development.
The Taiwanese phone maker disclosed that it has set up a wholly-owned subsidiary for its Vive VR headset, according to a statement made available to The Verge. The new subsidiary, which will operate under the name HTC Vive Tech Corporation, will be the company’s face in entering into strategic alliances geared towards developing the VR ecosystem across the world.
The decision to turn the Vive VR business into a separate subsidiary is a smart move by HTC to prevent the prospect of the VR headset being harmed by its smartphone business. Competition has been so intense in the smartphone market and this could impact negatively on the VR business if left as part of the overall company. Spinning off Vive ensures that potential partners are protected against losses in the event of things not turning out as desired in HTC’s smartphone business or any other.
The Taoyuan, Taiwan-based company also announced on Wednesday at the GSMA Mobile World Congress that it was entering into a partnership with a number of other firms to raise $10 billion for investment in virtual reality development. The consortium, which comprises 28 firms, is known as the Virtual Reality Venture Capital Alliance. It has a good number of popular venture capitalist companies as partners. One of the most notable partners is Sequoia Capital, a pioneer financial backer of both Apple and Google.
The venture capital alliance will be headed by HTC’s China Regional President of VR, Alvin Wang Graylin. It will be meeting every two months in Beijing and San Francisco to hear VR startups pitch their ideas in needing of funding, according to TechCrunch.
Virtual reality is considered a technology of the future. HTC is obviously hoping to feature prominently in that future, as indicated by its role in the setting up of this new $10 billion consortium. The company knows it has to be on its toes with strong competition from Facebook’s Oculus, Google, Sony and others.
The Taiwanese tech company had announced a $100 million accelerator fund back in April to support startups creating VR content.