Japanese VR startup Paneo gets $820,000 to create avatar-based social network platform

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Image credit: Paneo

See the original story in Japanese.

Among the several demo day events held from the end of last year over the beginning of this year, there was one startup that stood out. That startup is Paneo, and rather than labeling it VR (virtual reality), it seems more fitting to call it an avatar creation startup due to the company’s service called EmbodyMe. Last week the company began offering the app on Steam and in the Oculus Store. It can be used for free with Oculus Rift, Oculus Touch, and HTC Vive.

EmbodyMe is a VR app that creates an avatar for a user from just one head shot; then, through the use of a head-mounted display (HMD), it allows users to communicate over the internet as if they were actually talking to each other in the real world. With communication services that use moving images and sound like Skype (and similar) there are sometimes cases where nuances and context may be missed, which would not be missed in a face-to-face situation. EmbodyMe uses an avatar to compensate for areas where online communication is less than real and provides an environment that does not require people to meet and talk.

In this field, Microsoft and others are developing a mechanism that will capture the human body in 3D using multiple Kinect devices, making real-time rendering possible; however, it may not be easy to prepare the environment such as when a studio is needed, etc. Facebook is also attempting something similar using Oculus, but it is difficult to obtain reality, and takes much time and effort to create.

In contrast, with EmbodyMe, it is easy to create 3D models from head shots and depict them in real time in the metaverse according to the user’s actions. The appearance of a user while talking, along with the movement of their body and expressions are reproduced so clearly that it invites amazement. Rather than capturing the whole body in 3D and transmitting it, their “clear solution” is to use an avatar to bring about ease of introduction and playful elements. Initially, they are thinking to position themselves among users of games and entertainment which work with Oculus Rift and HTC Vive, incorporating such users as early adopters of EmbodyMe.

Paneo’s CEO and engineer  Issei Yoshida explained:

Right now, not everyone possesses a VR device, and we’re at the phase where the VR world is becoming more and more exciting. That’s where EmbodyMe comes in, providing users with a personal avatar to output video clips.

By posting these clips on Facebook, Twitter, etc., users can also share their avatar experiences with friends and anyone who doesn’t have a VR device, and we expect  “network effect” there.

Image credit: Paneo

EmbodyMe is currently free, but Yoshida does not appear to be worried about whether a business model can be established or not. For a generation familiar with mobile games, if they sell virtual items worn by the avatar on EmbodyMe, they may be able to entice users to pay money to buy them. When the world was fascinated by the Second Life metaverse large companies in Japanese opened virtual offices or branches out there, so it is also in no way difficult to imagine the possibility of advertising in the VR space as well.

Yoshida also mentioned the immediate priorities at Paneo, including to brush up the VR app, and to release the SDK, which enables third party developers to develop content and games using EmbodyMe’s avatar function. They have already received many requests from third party developers, so they are aiming to release the SDK (software developer kit) within 2017.

The Paneo team
Image credit: Paneo

Paneo team members Issei Yoshida (CEO/Engineer), Yuri Kashima (Co-founder, Designer, Modeler), and Yuki Tanabe (Engineer) are all previously from Yahoo Japan where they developed new apps and engaged in design. Two apps produced by them, Face Stealer and Avatar Phone, were selected as the Innovative Technologies 2015 award by the Ministry of Economy, Trade, and Industry. (Both apps are no longer available.) Additionally Yoshida was involved in the development of a “social memo site” and selected as a prominent IT engineer by a Japanese governmental agency during his university days. Taking a glimpse at their trajectory, it is possible to see their consistent devotion to the two concepts of social networking and avatars even years before sophisticated VR devices came out.

Image credit: Paneo

Will the day come when communication through VR surpasses that of chatting apps like Skype and Line? Of course, depending on the use case, users will use tools differently; but, in terms of enterprise software, it is easy to imagine that the areas of teleconferencing solutions dominated by Cisco and Avaya will evolve into a setup like Paneo, or be replaced by a setup like Paneo.

Paneo was established in June of 2016. Along with the launch of EmbodyMe the company announced that it had raised 90 million yen (roughly $817K US) from Japanese startup VC Incubate Fund. They will be exhibiting at the SVVR (Silicon Valley Virtual Reality) conference this week, so we can look forward to hearing more about the market reaction in the US.

Translated by Amanda Imasaka
Edited by Masaru Ikeda