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Paracosma: Reshaping the AR and VR Industry with Upgraded Efficiencies to Meet Customer Demands

  /  AR and VR   /  Paracosma: Reshaping the AR and VR Industry with Upgraded Efficiencies to Meet Customer Demands
Ken Ehrhart, Paracosma AR VR pandemic

Paracosma: Reshaping the AR and VR Industry with Upgraded Efficiencies to Meet Customer Demands

It’s no secret that the use of and investment in Augmented Reality (AR) and Virtual Reality (VR) across all industry verticals is surging these days. Both of these technologies are uniquely positioned to create innovative solutions via an immersive experience. As the enthusiasm for these techs mounts, companies are increasingly deploying them to accomplish various tasks. Thus, AR and VR applications are now moving from proof-of-concept prototypes to mission-critical tasks.

In an interview with GlobalTech Outlook, Ken Ehrhart, Founder and CEO of Paracosma shares his valuable insights on how the company is delivering revolutionary yet trendsetting AR and VR experiences that simultaneously make their way into the mainstream.

Below are the highlights of the interview:


Congratulations on Paracosma’s successful growth to date, please tell us your history?

Paracosma was founded at the beginning of 2016, as the world was witnessing the start of consumer virtual reality with the launch of the Oculus Rift and HTC Vive headsets. A year later, augmented reality joined the hype with the unveiling of Apple’s ARKit and Google’s ARCore in the consumer market.  These waves have continued with the expansion of the broader 3D market with modeling for photography replacement and industrial digital twins.

Paracosma has benefited by catching each of these waves resulting in consistently fast and exponential growth.  Over the last few years, the company’s annual revenue multiplied by an average of 2.2x and headcount multiplied 2.7x annually.


Can you please put Paracosma’s growth in context, of its markets and peers?

If one follows the VR and AR market, one can see waves of hype and corresponding volatility of the investment.  We have seen many other VR and AR companies struggle and downsize after raising and depleting large investment rounds before market revenues could support that level of expansion.

We are a closely held company, with equity capital coming from myself and some venture capital and technology peers, rather than outside institutional investors. That has allowed us to pace headcount and capital spending in parallel to client, project and revenue growth.

Our goal is to continue strong, sustainable growth faster than the general AR/VR markets.


As a successful venture capitalist, what made you think AR/VR was the right investment?

My VC firm, SunBridge Partners, has been hugely successful in bringing leading enterprise SAAS companies from the US to Japan.  We have successfully founded Concur Japan, Marketo Japan, Demandware Japan and others, which have enjoyed fast growth.  Working in the field of enterprise software, I have learned how to serve enterprise clients. I have also learned how difficult it would be for an enterprise IT department to develop AR/VR capabilities internally. Paracosma has been built to solve that problem. This becomes a growing opportunity as demand for AR/VR continues accelerating growth.


In what sectors have you found success?

Paracosma is a VR and AR Solutions Provider. The company offers VR and AR application development as well as 3D content creation, from 360 videos to 3D modeling. Most simply, it serves as a one-stop-shop for VR and AR services. Paracosma has deployed solutions ranging from AR for machine maintenance to AR for consumer face masks; from VR surgery training to management training; from photo-realistic 3D modeling to replace studio photography to full-scale digital twins of industrial facilities. With 75 employees, split between artists and engineers, Paracosma boasts of having the skills and capacity to deliver whatever clients need.


How has the Coronavirus Pandemic impacted growth?

Paracosma registered record growth in the first half of 2020. The first half revenue of the company increased by 176% over the prior year. It multiplied by 2.76x, which is significantly higher than the past average of 2.22x year/year growth. Undeniably, some of these projects had preceded the pandemic. The company has subsequently witnessed the pandemic’s economic impacts on its clientele and their clients. Generally, businesses are cautious around spending. But amid the pandemic the company’s existing clients added new projects and new phases of projects.

I believe that the biggest impact of coronavirus on VR and AR will clearly result from the pandemic lockdowns themselves and the demand for expansion of remote work and remote entertainment opportunities through the adoption of VR and AR technology. Although companies were initially forced into remote work by necessity, many are adopting long-term remote work-from-home policies not just because of the uncertainty of when people can return to traditional offices, but also because employees preferred remote working. Similar changes have been found in real estate, with office downsizings and out-migration from urban centers. All these changes are facilitated by VR and AR solutions that can recreate many of the benefits of face-to-face meetings in a virtual office.

There has been a surge in interest from companies, events and festivals for these virtual solutions. So in the longer-term, we are confident that the coronavirus pandemic will actually accelerate VR and AR adoption.


What has been the secret to your success?

Paracosma has locations in the US, Japan and Nepal. The combination of these three geographically diverse and strategic locations is part of the secret to its success. The US and Japan are the number one and two enterprise software markets globally.

The US is known globally for its technology innovation. Paracosma’s teams remain committed to quickly adopting and expanding the latest technology innovations for the benefit of their customers.

And while the US has the saying “the customer is always right” or “the customer is king”, in Japan the expression is “the customer is god”.  Thus, Japanese clients demand a standard of quality and service that is significantly higher than in the US.

Further, Nepal provides a large pool of brilliant and young engineers who are unfortunately traditionally underemployed. This allows Paracosma to grow its team at competitive rates.  As a service provider, the company knows firsthand that the quality of its services is dependent on the quality of its team.

Thus, we aim to deliver the best technology, with the highest quality, at the lowest price in the two largest global markets.


What are you doing to maintain this growth from now on?

I think the VR and AR markets are going to accelerate in terms of growth in the future.  Technology is improving; use cases are increasing, return on investment is being proven. So, Paracosma’s priority remains growing faster than its rivals in the markets.

Most of Paracosma’s new clients to date have come through face-to-face meetings at industry conferences and tradeshows. With the curtailment of in-person events, Paracosma is dramatically growing its outbound sales activity. In the second half of 2020, the company has focused on expanding its marketing and sales teams in both the US and Japan.  And most importantly, it continues to multiply its service offerings with the “productization” of what was previously bespoke solutions. This gives Paracosma’s expanding sales teams proven solutions to offer clients.

The company ardently believes that successfully implemented client projects lead to happy customers. This drives both word-of-mouth from satisfied clients and expansion of work with existing clients driving a base of recurring revenue.