Code Moment | VR content studio "Bifurcation Point Network" announces two consecutive funding rounds totaling tens of millions of RMB, with Source Code Capital as the sole seed-round investor

源码资本·August 15, 2022·0·0

36Kr has learned that Shanghai Fenchadian Network Technology Co., Ltd. (hereinafter referred to as "Fenchadian") announced the completion of a Pre-A funding round worth tens of millions of RMB. This round was led by HSG, with the capital to be used primarily for product R&D and technical team expansion. **Six months prior, Fenchadian also received exclusive seed funding from Source Code Capital's seed investment arm.**

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Source: 36Kr, Author: Ben

36Kr has learned that Shanghai Fenchadian Network Technology Co., Ltd. (hereinafter referred to as "Fenchadian" or "Bifurcation Point") announced the completion of a Pre-A funding round worth tens of millions of RMB, led by HSG. The funds will be primarily used for product R&D and technical team expansion. Six months prior, Fenchadian also received seed funding from Source Code Capital's seed investment arm, Source Code Capital, as the sole investor.

Founded in late 2021, Fenchadian's founder and CEO Changsheng Gu is a newcomer to the VR industry — he doesn't have years of battle-hardened experience through multiple hype cycles. He chose to start this company based on his own judgment of and passion for VR technology trends. This unconventional VR startup managed to secure backing from top-tier investors like HSG and Source Code Capital shortly after its founding, which is particularly remarkable given how cautious capital has been over the past six months. This may align closely with Source Code Capital's recently established seed investment philosophy of betting on people — "investing in your leap of faith."

Currently, Fenchadian is exploring the VR gaming space. According to Gu, this will be an immersive VR game unlike anything currently on the market, with a targeted launch between late this year and next year. In the medium to long term, the team also hopes to create authentic social experiences in virtual worlds, allowing people to freely experience rich and colorful worlds together.

Fenchadian founder and CEO Changsheng Gu, as an early employee of ByteDance, was one of the architects of ByteDance's recommendation and advertising algorithms. He led and built multiple core business and technical systems, experiencing ByteDance's explosive growth firsthand. After leaving Amazon in 2014 to join what was then Toutiao, he worked on machine learning and intelligent recommendation algorithm R&D — elements that would prove central to success in the mobile internet era.

"For entrepreneurship, especially in entirely new directions, passion and interest matter more than experience itself. I was drawn to Silicon Valley startup stories from a young age. After graduating, I planned to join a startup to gain experience for a few years — I didn't expect ByteDance to grow so astonishingly fast," Gu told 36Kr. "Before choosing VR, I spent a year deeply researching cross-border e-commerce, consumer goods, Web 3, and various other sectors. Ultimately, I felt that VR's revolutionary upgrade to interaction, combined with the current state and development trajectory of VR technology, represented a direction with massive potential, and decided to start my new venture there. Some time after deciding to build VR games, Facebook renamed itself Meta and went all-in on the Metaverse, which gave me even more confidence in this direction." VR has seen multiple pronounced hype cycles in the past. With Oculus Quest 2 surpassing ten million units sold globally and Pico raising its annual sales target to 1.8 million units, the VR spring the industry has been waiting for may finally be arriving.

Yet while VR hardware flourishes, content supply hasn't kept pace with hardware adoption. A common misconception among traditional game developers is that VR games aren't fundamentally different technically, which has led many VR games to fall short of player expectations. In reality, while toolchains and engines may remain similar, nearly everything else — from game scripts to visuals, interaction, UI, movement mechanics, rendering, spatial audio, to IK computation — differs from traditional games. VR gaming requires breaking established thinking and building entirely new spatial interaction logic, which presents significant entrepreneurial opportunities.

Despite VR's current challenges, Gu believes the market is already showing signs of explosive growth. First, VR interaction methods have become richer, bringing step-function improvements to gaming experiences. Second, display technology has made major breakthroughs, with 4K and higher-resolution MicroOLED delivering more realistic immersion. Third, Meta's upcoming high-end Cambria device this year will drive another round of global VR hardware upgrades. And advances in high-performance GPUs, edge computing, and adjacent technologies will enable VR ecosystems to reach broader user bases.

Looking at VR device users, female players already represent a significantly higher proportion than in traditional console gaming, and fitness-oriented gameplay popular among these women aligns with future GameFi and metaverse trends. Additionally, younger players adapt more quickly to new experiences and show higher acceptance of VR, creating a customer base for the evolution from VR gaming to VR communities.

On market strategy, Gu stated: "We go where the users are." At this stage, VR users are primarily overseas, while Pico is opening up the domestic market. He expressed hope that Chinese innovative companies can play a larger role in this space.

Regarding the core team, Gu told 36Kr: "Though still small, our core team includes game designers with years of experience in the trenches who have led teams to successfully launch multiple games with over 100 million RMB in revenue; and core technical leads from ByteDance and Alibaba who have led businesses from zero to one, repeatedly winning against larger competitors with fewer resources. With such excellent, reliable partners, combined with our passion and patience for VR, we're very confident about the future."

Ziheng Li of Source Code Capital stated: "VR/AR serves as the gateway to the new era of spatial computing. The gradual maturation of its industrial chain has brought transformative changes to display and interaction, providing users with richer and more immersive information experiences. As a new generation of young entrepreneurs, Changsheng has personally experienced the evolution and development of major tech companies from the front lines, while maintaining deep passion for the VR industry. We were moved by his multidimensional thinking and extraordinary entrepreneurial drive, which aligns closely with Source Code Capital's people-focused philosophy of 'investing in your leap of faith.' We look forward to the Fenchadian team continuously building quality content in the virtual reality space and creating new forms of connection for users on next-generation computing platforms."