Improbable, the London-based pioneer in virtual worlds technology, has achieved a significant milestone by turning its first profit in 2023. The company, which had been known for its substantial losses in previous years, reported a profit of £11 million, marking a dramatic turnaround from its £152 million loss in 2021. This transformation comes as a result of Improbable's strategic shift towards a more targeted operating model, focusing on its role as a 'venture builder' in the metaverse space.
The company's financial results for 2023, filed with Companies House, reveal a remarkable improvement in its financial health. Excluding one-time items, Improbable's revenue increased by 37% to £66 million. This growth was accompanied by a strong cash position of £185 million at the end of the year, bolstered by successful exits from its initial ventures, including the gaming division Multiplayer Group and its defence and national security business.
Improbable's journey to profitability has been a decade-long endeavor, characterized by its focus on distributed systems for virtual worlds. Over this period, the company has honed its expertise in bringing complex technology products to market, seeded and grown businesses, and developed proprietary technology with significant barriers to entry. Two years ago, Improbable doubled down on its commitment to the metaverse, a decision that has now begun to bear fruit.
The company's MSquared metaverse platform has gained traction, with many external content developers in early access mode and tens of metaverse projects being regularly tested with consumers. This progress underscores Improbable's position at the forefront of addressing scale in traditional cloud computing and the development of emerging technologies for the metaverse, blockchain, and AI.
Herman Narula, founder and CEO of Improbable, attributes the company's success to its unique ability to pursue distinct, real businesses simultaneously. He emphasizes that venture building has proven to be the optimal model for both Improbable and the metaverse, as experimenting with various use cases is key to achieving adoption. Through strategic investments in both large partnerships and startups, Improbable continues to advance the case for the metaverse.
The company's transformation from a loss-making entity to a profitable venture builder demonstrates the potential of the metaverse sector and Improbable's adaptability in a rapidly evolving technological landscape. By leveraging its experience and unique insights, Improbable aims to shape the future of virtual worlds and immersive technologies.
Narula expressed gratitude to the leadership team, particularly CFO Dan Odell, for their dedication in propelling Improbable to its current position of strength. As the company moves forward, it remains committed to its ambition of shaping the future of the metaverse, backed by a decade of experience and a newly proven business model.
