Immersive Experiences: An AED45 Million UAE-Based Equity Fund, Is About To Reshape The MENA Region's Entertainment And Leisure Sector Formed in 2017, Immersive Experiences came to life after the co-founders identified a gap in the region's entertainment industry, which led them to spend over a year and a half selecting a suite of pioneering, engaging, and multi-sensory entertainment concepts to completely reshape the current entertainment options that exist in the region today.
By Entrepreneur Middle East Staff Edited by Tamara Pupic
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The COVID-19 crisis has presented investors with an opportunity either to pause and rethink their investment strategies- or to unlock their courage and use their capital to completely disrupt and redefine industries as we know them today. Sameer Ali, Mohamed Ali, and Sultan Alrajhi, the trio of seasoned entrepreneurs who co-founded Immersive Experiences, an AED45 million UAE-based equity fund, fall in the latter group.
Formed in 2017, Immersive Experiences came to life after the co-founders identified a gap in the region's entertainment industry, which led them to spend over a year and a half selecting a suite of pioneering, engaging, and multi-sensory entertainment concepts to completely reshape the current entertainment options that exist in the region today. To date, its portfolio includes a mix of franchised facilities, as well as its own proprietary flagship concepts- these include Xstrike, a live-action combat simulation concept that successfully bridges the gap between traditional paintball and laser-tag; Woo-Hoo!, an experiential edutainment center that stimulates children in a fun and entertaining way; MultiVRse, a bespoke virtual reality theme park that offers an unparalleled combination of realism in motion, graphics and team-member interaction; WipeOut Park, the action-packed experience known from the popular television show that brings challenging courses and epic obstacles built on both land and water; and DARE, the first of its kind gamified indoor adventure park in the UAE.
Bringing these concepts into reality is a challenging task, involving several shifts taking place from the conceptualization stage to the final implementation, all of which Sameer Ali considers to be a good thing. "It's important to never "settle' when developing a concept," he explains. "You need to be constantly asking yourself, at every stage of the process, whether there is a way of improving individual aspects, or the concept as a whole. And, a concept never really "fully develops,' but continues to evolve over the course of its lifecycle." Asking the key questions at every stage of the process is crucial, Ali adds. "We need to ensure that the business model is resilient with margins that are not just healthy, but sustainable as well. We need to ensure that the concept will not just 'work' as a standalone location (for example, in a warehouse), but THRIVE in such circumstances. Therefore, we keep on returning to these questions with each stage of evolution and development, and if we're not satisfied with any of the answers, we have to refocus our efforts, re-strategize our goals, and make the correct tweaks and alterations to get the answers, and eventually, the outcome, that we need."
Havoc City, Immersive Experiences. Source: Immersive Experiences
With this approach, it is easy to understand that Immersive Experiences is based on very solid foundations, and thus attracts many requests for cooperation and partnerships. The fund has an aggressive roll-out plan that is set to see more than 15 facilities launched across various territories in the region in the coming years, a couple of which are set to open by the end of 2020. Mohamed Ali notes that all their plans are built to withstand any future market changes and challenges, and to add to that, Sultan AlRajhi believes that the regional market seems ready for their new and refreshing ideas. "We have seen a surge in interest from top retail players across the GCC who are looking for new opportunities and innovative concepts to reshape the retail experience," he concludes. "Investor confidence remains solid; in fact, confidence is rising as new opportunities present themselves, and new ideas are brought to the fore. Now is an exciting time for the industry as companies and investors pivot to a new way of thinking to accommodate customers and their demands. Moving forward, our focus will continue to be on creating concepts that are disruptive, but also safe."
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INVESTING WITH COURAGE
Sultan AlRajhi, co-founder and Managing Partner, Immersive Experiences
Sultan AlRajhi, co-founder and Managing Partner, Immersive Experiences.
Source: Immersive Experiences
Please tell us more about the investment thesis of your fundwhat does it mean to set "the future direction for growth in the leisure and entertainment sector by investing in new, disruptive concepts"?
The region's entertainment industry has remained stagnant for the last two decades with little in the way of innovation. People, companies, and investors have been too focused on safe concepts– they haven't looked for inspiration, or aimed to bring in anything radical, new, and able to shake up the marketplace. This means the landscape is ripe for disruption and poised to accept new concepts. Despite a sluggish attitude towards change, over the last 5-6 years, investment in traditional entertainment has actually increased as retailers look to drive footfall. We feel this is a sideways, or backwards step. In millennials and Gen Z, we see that audiences are changing. Personalized experiences and 360-degree immersive entertainment is where the industry is headed. The investment in edutainment has also increased significantly, as audiences seek more unique and experiential sources of fun and opportunities to socialize. Moving with the times has never been more important, so you must have an eye on trends, successes and failures in order to deliver a product that is impactful, sought-after, and fun.
Has the COVID19 crisis changed your strategy when it comes to the fund's current investments?
It hasn't changed our strategy. It's made us pause, reevaluate, and change our operations model, but the strategy remains the same– to focus on fresh, innovative concepts that disrupt traditional leisure and entertainment. The COVID-19 crisis has lead us to perform what we call our internal "sanity checks" on the concepts we have in the pipeline to make sure that they can function just as well in a post-COVID-19 world, as they would before. Our belief in the leisure and entertainment industry as a whole has not only been reinforced, but strengthened– we do believe the industry will boom in a post-COVID-19 world. We're still driven by our core goals: competitive pricing, premium experiences, and innovative concepts. If anything, the COVID crisis has accelerated the decline of traditional retail within malls, which was already in freefall due to the rise of e-commerce. This trend has lead to a number of developers in the region making overtures to us, because of which we've had to accelerate our own expansion plans given the opportunities present.
What piece of advice would you share with other investors in the leisure and entertainment sector?
Don't be afraid of investing in new, innovative, and fresh concepts, but always keep the demographics of the region in mind if you're doing so. What works elsewhere is not guaranteed to work in the GCC. Avoid the temptation to import ideas and concepts wholesale from abroad, and "drop" them into a new environment where customers have different tastes, wants, and sensibilities. Ideas are there to be reworked, reinterpreted, and repackaged– you must be prepared to put in the work to evolve concepts and always get creative. Feasibility is also hugely important. At the end of the day, any investment needs to make sense from an ROI perspective, as business ideas are only as good as the profits they make for their investors. Also, don't be afraid to look closer to home for ideas and talent. There's lots of fantastic talent in the region right now and, importantly, they know all about the people you want to get through the door. Regional talent knows what works for the region in a way that a lot of external consultants may not- it really is that simple
NEVER SETTLE FOR AVERAGE
Sameer Ali, co-founder and Managing Partner, Immersive Experiences
Sameer Ali, co-founder and Managing Partner, Immersive Experiences.
Source: Immersive Experiences
Given your expertise in the leisure and entertainment sectors, please tell us more about how the fund selected the ventures it has introduced or is planning to introduce to the UAE/GCC region?
All our concepts and intellectual property have been created in-house. Each concept represents something unique and fresh that's new to the region, and more importantly, they're designed to cater to the region's demographics– they appeal to a diverse range of tastes, attitudes, demands, and cultures to have maximum impact and longevity. We're proud to say that each venture we've introduced has its own distinct set of unique selling points that sets both it and us apart from the old traditional concepts that have dominated the market and are failing to innovate and grow. For example, woo-hoo! disrupts the edutainment market with custom-built exhibits and unique learning objectives, whereas Xstrike taps into a sizeable and unaddressed niche market of people who find laser tag too kiddish, and paintball too painful. It brings the world of online gaming to reality, which taps into Gen Z and millennials. Edutainment is attracting investment on a significant scale nowadays, and is emerging as one of the most exciting areas of the sector as audiences look to be challenged in new ways– the best entertainment concepts today are not passive, but rather entirely immersive and fascinating on numerous levels. We also know that competitive socialization will be the driving force in the next wave of entertainment- audiences are seeking somewhere to play, compete, hang out, and socialize. We're proud to be the only independent leisure and entertainment portfolio in the market with concepts that are flexible and can be easily altered to fit any location and audience. We expect an upward trajectory.
What would be your piece of advice to other leisure and entertainment entrepreneurs developing and launching other innovative concepts these days?
Never rule anything out. We operate in a market that is open to experimentation. This is fantastic! Make the most of it. Possess an attitude that lies halfway between crazy and rational, and never settle for average or mediocre with the concepts you are launching. It's important to keep an open mind to ideas that seem utterly ridiculous, because, more often than not, these are the ones that, with a little fine tuning, end up being the very best you have! It's essential to make sure your business model has enough strength and resilience to see you through periods when ideas and solutions are not flowing as freely as you would like. Never just focus on one source of revenue– diversify your revenue sources to build strength and resilience into your monetization model. Also, and this is important in a market such as the Middle East, but also everywhere, you can't rely on footfall solely to bring in customers and generate interest. The concept needs to work anywhere, regardless of location, be it in a warehouse at the outskirts of the city, or in the middle of a busy shopping mall. If it's good enough, it'll draw people to it. Inspiration is all around. Look at existing concepts and see what can be improved, listen to others and make sure you really absorb what they're saying.
From the perspective of your enterprise, what are your plans for 2021?
The year will be a very important period for us with exciting concepts and projects in the pipeline, including DARE and multiVRse, which will offer something new, fresh and exciting to the sector. DARE is the world's first fully gamified indoor adventure park, and multiVRse is our very own bespoke and custom-built virtual reality theme park. Gaming represents one of the fastest growing entertainment sectors the world's ever seen. We will be at the head of this growth through introducing thrilling, disruptive, and immersive concepts that bring together the latest tech and most popular games and platforms. Each of these concepts and IPs have been created inhouse, which is something we're proud of. As well as new launches, we'll expand our footprint across the GCC, and explore more franchising opportunities in the region. Raising over AED45 million in funds in 2019 allowed us to conquer all our near and short-term goals –however, we've received several proposals for further partnerships– of which we are currently evaluating strategic partners to help add value to the fund
BUILDING SOLID FOUNDATIONS
Mohamed Ali, co-founder and Managing Partner, Immersive Experiences
Mohamed Ali, co-founder and Managing Partner, Immersive Experiences.
Source: Immersive Experiences
How has the local market reacted to your innovative concepts like Xstrike, as well as those that you plan to launch in the near future?
The reaction has been well beyond our expectations. Post the COVID-19 lockdowns, we've seen people rushing back, which is a great sign. This is down to the fact we listened to our customers, and adapted our concepts based on their feedback. We put this knowledge to work to change our operations in line with what people now expect from an entertainment provider. Our newest concept, woo-hoo!, is an innovative approach to learning and play for children with an unmatched hands-on experience. We will be opening doors to public this month, and early indications suggest that it'll be exceptionally well received, as families are looking for opportunities to have safe spaces to build lasting memories, and make up for the time lost in the challenging few months that we have gone through. We're opening in unprecedented times, and we've adapted our operations to not only meet the new safety standards, but also go a step above to make sure that all spaces are exceedingly safe for our staff and guests. There are challenges, but there are also opportunities to establish our concepts at the pinnacle of the sector.
What have been your main lessons learnt during Xstrike's construction and development phase?
The main lessons have come from finding new ways to value engineer our concepts, while still maintaining the highest quality and standards our customers expect. This has been challenging, but it is something I'm confident we've achieved across the entire project. Being smart, working with trusted and reliable partners and contractors, not compromising on our values, and, ultimately, not diluting the product has always been the goal. The funding we raised gave us options, but how we planned to use it in the COVID-19 environment has taken on an increased level of importance– how we value engineer our product is essential to our plans. But, with seasoned entrepreneurs at the helm and a team of some of the top minds in the industry, Immersive Experiences is moving ahead with its ambitions of changing the face of leisure and entertainment through innovative offerings such as Xstrike, woo-hoo!, MultiVRse, DARE, and other future concepts
When it comes to the fund's other projects, how has the COVID-19 crisis influenced your work on the ground? How have you navigated this challenge?
COVID-19 has definitely raised the bar in terms of the types of difficulties we face day-to-day, as well as presenting us with a range of otherwise unforeseen challenges. Once it was apparent that the pandemic was going to be a long-term problem, we had to adapt and overcome many obstacles. For woo-hoo!, we had to delay our launch due to the disruption to work while we were in lockdown. This presented a unique challenge of not being able to continue with some of the contractors in other countries. We are still navigating these issues by working closely with our core selection of trusted partners to create and commit to a tight schedule. This includes trusting them to fully understand and implement the new rules and regulations our industry must follow, and thereby enable us to work effectively and overcome any new challenges. We'll continue to navigate the challenges COVID-19 presents us, and to seize the opportunities it throws our way.
Your fund has successfully navigated the COVID-19 disruption- to what do you attribute your ability to do so, and what advice do you have for other entrepreneurs undergoing this crisis or any other disruptive shift?
Our ability to successfully navigate through the pandemic is solely attributed to having a team that is close knit and functions as a family. The team at Immersive Experiences stayed resilient and worked on creative solutions in order for us to overcome the disruption caused by COVID 19. I would also attribute this to our unique concepts and taking swift action in these troubled times. The concepts and business models were built to withstand market changes and challenges– something we've seen a lot of lately. From the beginning, our model was anchored in deep consumer insights and strong economics, allowing us to ride downturns in the markets. As the effects of the pandemic were becoming apparent, we were able to craft a short and mid-term strategy for dealing with the disruption. The ability to be flexible, agile, and open to seeing opportunities in every challenge really can't be understated in today's world. My advice to other entrepreneurs is to ensure you build a strong team that is appreciated and respected. Overcoming such challenges requires the team to be working as a unit, and to be able to come up with a model and strategy on a foundation of strength and resilience, so you are in great shape to withstand any hurdles that may come your way. Be prepared for things not to go to plan, react positively, and seek the opportunities that are behind every challenge
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