Matterport Wants To Photograph The World In 3D, One Room At A Time

By Louis Bedigian for Benzinga

Matterport is arguably one of the most unique startups to come out of Y Combinator.

The company (which was part of the winter 2012 class) develops technology for capturing and modifying 3D images of indoor environments.

The firm is still young, but it has already attracted the attention of Google (GOOG), which partnered with Matterport to propel its Project Tango initiative.

CEO Bill Brown recently told Benzinga about the company's impressive journey from small startup to becoming a rising force in 3D imaging.

Matterport has an exciting partnership with Google. How did it begin?

Bill Brown: Google has something called Project Tango, [which] actually started as part of Motorola Mobility's ATAP. Through various contacts, I knew some of the folks from there. We had some other contacts with the team who found out the project was happening.

I got engaged with them, saw what they were doing and basically ... we decided we needed to make a solution that included the capture software. We thought it was really important that this was as simple as distributing a picture. Long-term we believe that these 3D sensors are going to go into mobile devices, and Matterport really doesn't feel like we need to be a hardware company. Even from the start when you look at the first prototypes that Matterport did, we had an application that was running with a handheld sensor.

As we started working with Project Tango, we basically said, 'Wow, we can make software that takes the data you're capturing and does a reconstruction just like we're doing with our professional business.'

That was the impetus of it. We ended up officially becoming a partner with [Google]. When they had the very first Tango device, which was in a phone form factor, we worked with them to get our software running on it. Very quickly we were able to do a demonstration of a full room, capture and reconstruction, using that device. We continue to be partnered with them.

We believe that the Tango platform is going to be a part of many mobile devices that have 3D sensors. Matterport is going to have an application that will allow those users to capture in real-time and reconstruct that space either for real-time use on the device or for distribution to other people, either for displaying or for modification.

I loved Matterport's 3D capture of the iconic Seinfeld apartment from Hulu. What other cool things are you working on?

Brown: We're making a big push around media entertainment and news media. Our feeling is there [are] a lot of stories where there's a particular space that is a central component or [almost acts like a] character within the story. We want to replace or augment still imagery to provide an immersive experience and do that in a way that enables storytelling to blend with the medium.

The Seinfeld thing is a great example. Instead of having a gallery of pictures, we're letting people walk through the apartment. We've gotten a lot of feedback on that -- it's a hugely popular model. It just creates a much stronger tie to the story and to the series. They're gonna use it in some promotional things that they're doing around Seinfeld.

And that's just the beginning, I imagine?

Brown: We expect this area around entertainment is going to be great. We have two or three companies already using the technology for doing location scouting for the movie and television industry. Wet think it's a natural. You're gonna start seeing some of the sets and locations actually get captured, so it can be incorporated into some of the material provided to the fans of the movie or program.

We're definitely starting to see it in [news] stories. The Detroit Free Press put out a story recently [about] this huge riverboat project. We were able to capture this great model of it. It's actually one of the most visited models that we have.

Another thing we're doing is adding [a feature] called Mattertags within the content. You can pick an object or a particular point within a space and you can tag it and add multimedia content to it. It's gonna start with pictures and descriptions, but it could also be audio content. Imagine you go to a place and all of a sudden you've got the option to hear an audio narrative from that particular position.

Or you have the ability to pull up a video. It could be an old video that was shot from that location or it could be a video that was shot in tandem with the model so that you're seeing it in place.

We think the aspect of storytelling in three dimensions, like merging storytelling with the actual visual medium, is really exciting.

Tell us about the technology that inspired Matterport.

Brown: Matterport started in 2011. Matt Bell and Dave Gausebeck were really the two fathers of the company. Matt had been working at a company called Reactrix, [which] had these location-based, interactive systems where they would project images onto a surface. It used gesture-tracking to let people interact with that projection.

The system that they use to do gesture tracking was a 3D system. It was very expensive [and involved] a $50,000 camera. When Microsoft (MSFT) came out with the Kinect system, that sort of thing was a $150 camera. It pretty much did what the $50,000 piece of equipment did, and so he kind of had this 'aha moment.' [He realized this technology] is going to be incorporated into consumer devices and there's going to be this whole other industry that ends up coming out of that.

He started a company to look at ways to leverage the technology and pretty quickly came to the conclusion that instead of using this 3D [technology] to track gestures, they could just incorporate the data with a camera and do complete reconstruction of spaces and objects. This was really before anybody was working on that type of reconstruction.

He and Dave started working on the technology. They got some great proof-of-concepts. They started putting the team together and really focused on spaces instead of objects and pieces. They saw a lot of utility in it. It's probably the harder of the problems to solve, so they thought it was more interesting and valuable challenges in building that technology.

Matterport has attracted some very impressive investors, and it did so much sooner than most startups.

Brown: [Matt and Dave] raised some seed money and then they ended up in the Y-Combinator winter 2012 class, which was good. That helped them continue to build the team. They ended up raising the first round of funding [in March 2013]. Lux Capital, Felicis Ventures [and] Qualcomm Ventures (QCOM) were the major investors at that point.

We ended up launching the product in March 2014 [after] three years of development. Around that time we also raised the Series B round [and] brought DCM to the table.

Was it a challenging process?

Brown: There was definitely a trend in the investors we took money from versus the ones we didn't pursue.

We [did] these demonstrations [of] prototypes that we were showing. The end result was a little bit rough, but the folks that invested -- like Felicis, Qualcomm and Lux -- they could see the potential and didn't necessarily get too caught up whether, at this really early stage, we had everything completely polished ... proven and vetted.

These investors tended to be investing in the potential of what we were doing. The theme was, 'If you can make this an immersive form of media, it's going to be very popular and you're going to have a lot of uses for it. We're gonna fund you to make sure you can do that technology development.'

It sounds like investors have been really receptive to what you guys are doing.

Brown: With us you either see the long-term value and buy into that, or, if you were gonna get caught on the short-term of what's gonna happen over the next 12 months, it's an awkward position because we couldn't tell you. We don't know. We're going into a new market. We hope to get the adoption. We actually didn't expect to get the adoption we got. But it's two different profiles of investors that we found. We've been lucky to attract people who see the potential.

How versatile is Matterport's technology?

Brown: The technology became very applicable to any business that gets value from doing a presentation of a space. The most obvious market to go into for that was real estate. In July of last year [we] officially announced an offering into [that market]. Pretty quickly thereafter we had a partnership with Redfin [in August 2014].

Everybody who presented it instantly saw the value as being something that was different than the previous generation of virtual tours. We started to quickly get market adoption, which doesn't always happen [for] startups.

For the past year I have really been focusing on the real estate industry. Now we're starting to get a lot of related markets, so things like hospitality, vacation rentals. We've got people shooting museums.

Any space that you have that is currently using a gallery of 2D images, we have what we think is a much more immersive and a much more engaging way to give somebody a sense of what it's like to actually be physically in the space.

What are Matterport's long-term aspirations? Is the company thinking about going public?

Brown: We think we've got a huge opportunity. We split our business into professional 3D solutions and consumer 3D solutions. The consumer solutions are more [about] mobile capture for VR and AR.

The professional business, we think that is something that pretty quickly could be in the hundreds of millions of dollars of revenue. It will be a very profitable business. We think that could be the basis of a public company. Plus, we think there is this bigger opportunity in the consumer [space].

We think this is a standalone company in and of itself -- a very valuable and sizeable company. Probably the most likely course would be an IPO a few years down the road.

When will smartphones be ready to take advantage of your software?

Brown: Based on the things we're seeing, I think first half of next year you'll start to see the first devices. I think they'll be very good quality from a capture standpoint. I think from that point, over the next two years, you'll start to see adoption and a lot more penetration of these types of devices.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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