The virtual reality company, which will soon be worth $2 billion, had its humble beginnings as a Kickstarter campaign. What will become of the project backers and will this deal change the crowdfunding platform?
Little did the nearly 10,000 backers to the Oculus Rift Kickstarter campaign know that the project they funded would eventually lead to a multi-billion dollar payday for the virtual reality headset's creators.
But, indeed, Facebook announced on Tuesday that it has agreed to snap up 18-month-old Oculus for $2 billion.
While this is a big moment for Oculus and Facebook, it's also a major deal for Kickstarter. The crowdfunding platform hosted the massively successful campaign for Oculus' first version of its virtual reality headset in 2012. This campaign led to more than $2.4 million being raised from 9,522 backers.
"I would assume this would have been the most successful exit for a company that got started on Kickstarter," Gartner consumer technologies analyst Brian Blau told CNET. "It's a good platform for different technology and innovation, and Oculus falls right into that category."
It makes sense that products consumers get behind would also capture the attention of major companies. However, Blau points out virtual reality is nothing new. Oculus could have launched on Kickstarter because selling the headset the traditional way, like through venture capital funding or some other means, seemed impossible.
"There's been many virtual reality displays and concepts for over a solid 25 years," Blau said. "It's possible Oculus went to Kickstarter because they couldn't find any other way."
While Oculus is cashing in, this doesn't mean much as far as dollars going back to Kickstarter or the thousands of project backers. Part of the point of Kickstarter is that creators and inventors have total creative freedom over their projects and thus aren't weighed down with acquisition restrictions or future profit regulations.
However, that doesn't mean all backers are happy about the Facebook deal. Shortly after the news of the deal broke on Tuesday, dozens of backers started leaving angry comments on the Oculus Kickstarter campaign page.
"I would have NEVER given a single cent of my money to Oculus if I had known you were going to sell out to Facebook. You sold all of us out," backer John Wolf wrote. "I hope this backfires horribly for Oculus and Facebook. I will personally discourage absolutely anyone I know from buying what was once an indie dream and is now a soulless corporate cash cow. God, I want a refund so badly."
Another backer Michael Cooper wrote, "What in hell was the point of kickstarter if you sell out to a giant company like facebook? This is very disappointing. I will no longer be supporting the Oculus rift in anyway."
While the Facebook Oculus deal is likely the most lucrative Kickstarter story, it isn't the first time a project funded on the site went onto bigger things. Not only have Kickstarter films been acquired by major studios like Focus Features and books have bought by top publishers like Penguin, but also other tech products have been acquired.
Last year, the TidyTilt earbud cord wrap, kickstand, and mount for the iPhone was acquired by Logitech; and, the online magazine Matter was acquired by Twitter co-founders Evan Williams and Biz Stone's blog publishing platform Medium.
Despite it seeming like traditional players are becoming increasingly interested in Kickstarter-like products, Blau said that the crowdfunding platform will continue to be a go-to place for alternative and unusual innovations.
"The types of products you're going to get on Kickstarter are a little different," Blau said. "The type of people that back Kickstarter projects like to back companies that take a risk."
Kickstarter declined to comment for this story.