Why We Invested in Party.Space
When I joined Day One Capital as a full-time investor in late January 2020, I took a one-day trip to Warsaw to meet a founder. I didn’t suspect at the time that this trip would be the first and the last business trip I’d take as a professional investor for the next 20 months. I also remember how great it was at the beginning of the pandemic to Hopin to different conferences all around the globe. But by the end of the year, I just refused to attend any of them. Recently, I joked with my kids that I am a GenZ investor but, unfortunately, in this case, Z stands for Zoom.
The global pandemic made remote work a requirement and a bare necessity wherever and as long as it was possible. Although opinions differ on the longer-term effects of remote work regarding work efficiency and mental health, distance working is more popular than anyone could have ever imagined. The downsides include miscommunication, difficulty to stay motivated, lack of social interaction and challenges to the management. Low-level engagement has long been the greatest issue of virtual events which are central for companies relying on remote work.
As a response to this challenge, the online events industry has been undergoing a massive transformation where the demands from event tech shifted more and more towards immersion and having fun online. Parallel to what is happening at the workplace, with the rising popularity of the metaverse we are seeing how the boundaries between physical and digital are disappearing.
We first met Yurii and the Party.Space team in early March 2021 when they told us about the end of the year party of a well-known music subscription company. The product they first built was a browser-based 2D platform where each visitor was represented by a bubble with their video feed in it. People could interact based on their proximity to each other, have one on one and group conversations similar to those in real life. The idea was to have as much of real-life communication dynamics as possible online, and the initial feedback showed that people were content. When Party.space signed the contract, the platform was still in 2D. The client wanted one in 3D. so within less than 3 months before the event, Party.Space successfully managed to create the 3D virtual space. The event turned out to be a massive success and had more than 3,000 attendees from all over the globe.
Following their progress in the spring months, we were convinced that Party.Space has built a powerful product. Client feedback emphasized the “fun factor”, the engagement rate of events on the platform stood out and all in all, the product resonated well with customer expectations. We were also impressed by the resourcefulness of the team as they got to this point of the journey by raising only 200K USD in angel funding. Besides building a robust product, they also managed to attract great talents from companies such as Unity and have premier access to the world-class software engineering pool of Ukraine. We believe that Party.Space is well-positioned to capitalize both on the virtual event and metaverse trend, given their technology and talent. At such an early stage our fund focuses on founders capable of building strong technology-driven products, so I was happy to lead our first investment in Ukraine in Party.Space as part of a $1 million seed round, with TA Ventures as our co-investor.
