It’s almost hard to believe that Baobab Studios debuted its first animated VR short, Invasion! last April. Since then, the experience has made its way onto just about every VR platform, including the recently launched PlayStation VR, and a sequel was announced at Oculus Connect. Invasion!—created by Eric Darnell, who directed the Madagascar movies and is currently Baobab’s chief creative officer—is making its way to traditional movie theaters as a full-length feature film created in partnership with Roth Kirschenbaum Films, a movie studio founded by Hollywood veterans Joe Roth and Jeffrey Kirschenbaum.

Today, the studio announced that it has just raised $25 million in Series B funding, with Horizon Ventures as the lead investor. Horizon’s investment in Baobab is led by Phil Chen, founder and former content officer for HTC Vive, stands among several other companies that are returning for a second round of funding. New investors include Twentieth Century Fox, Evolution Media Partners, China’s Shanghai Media Group, Youku Global Media Fund and LDV Partners. The investments bring the studio’s total funding to $31 million, making it one of the top funding rounds for a content studio to date.

With the new investment, Baobab brought on Larry Cutler as its new CTO. Cutler was formerly Pixar’s technical director for Toy Story 2 and Monsters Inc., and then became global head of character technology for DreamWorks Animation. Additionally, Baobab has also appointed Chris Milk, founder and CEO of Within (a story-based VR content portal), to its advisory board. Milk has been a longtime proponent and pioneer of VR content.

Baobab CEO (and former VP at Zynga) Maureen Fan and Kane Lee, the studio’s head of content, spoke with [a]listdaily about the funding announcement along with the success of Invasion! and how it’s being made into a movie.

What do you think led to such a significant funding success?

Maureen Fan, Baobab Studios CEO

[Fan]: We think the reason why we were able to raise such a round in such a short amount of time is given to the traction that we’ve had from the Series A through now. We only founded about a year ago, so traction means introducing Invasion! Consumer adoption-wise, Invasion! is one of the most popular—if not the most popular—pieces of content out there in VR. We are on just about every single platform: the HTC Vive, we launched day one on the PSVR (PlayStation VR), we’re on Oculus Rift, on [Samsung] Gear VR, and on Within, Hulu, Jaunt, etc.

So besides having great consumer adoption and validation, we also had great traction with the HMDs (head mounted displays) and distributors. The Oculus Connect keynote featured our next VR short, Asteroids! Besides consumers and distributors, there’s also Hollywood. We just announced a partnership between Baobab Studios and Roth Kirschenbaum Films. [Joe] Roth was the former chairman of Disney, and his production company was behind Maleficent, The Huntsman, and the entire Alice in Wonderland series. They partnered with us to take Invasion! to the big screen, turning it into a full-length animated feature film for the rectangular screen. This is great validation from Hollywood because they care about IP. This the first time that IP was sourced from VR going to Hollywood rather than the other way around.

With the funding and partnership, do you feel that Hollywood is regarding VR in a very serious way?

[Fan]: I do. Our lead investor isn’t Hollywood. Horizon Ventures is stationed in Hong Kong, and they’re traditionally a technology investing firm. They invest in us not only because of our technology, but on the strength of the team. Phil Chen, being a VR expert, in seeing what was happening internally within our team, had the confidence and excitement to lead our Series B.

But the reason why we had all these great media companies also invest in us is because they see VR as not only potential for IP, but as something that’s going to revolutionize their business, and they want to partner with teams that know how to do storytelling in a different way. What these media companies care about, first and foremost, is storytelling. That was great validation for us from Twentieth Century Fox.

A lot of VR right now is targeted towards early adopters. They’re more niche, so you have hardcore games and documentaries, but not a lot of the universally appealing stuff that’s in between. I think one of the reasons Invasion! has been so successful is because it is broadly appealing to just about every single demographic group. But also because we care about story first. I know a lot of people talk about story, but we feel that a lot of VR creators are focused on technology first and the story is in service of the technology. We take the opposite approach.

Eric (Darnell) oftentimes says he’d prefer a good story animated with stick figures than a beautifully drawn film with a crappy story. It’s always story first, and I think that’s what Hollywood recognized in what we’re doing.

How does Baobab plan to use the additional funding?

[Fan]: We’re using it in three main ways. One is to create additional experiences that bring characters that people love to life in VR. People really loved Invasion!, so that’s why we announced Asteroids!, our follow-up. It’s featuring the same characters but in a different setting and different type of animation and focus. So, creating new experiences, but also experimenting even more.

VR is a new industry and a new cinematic language, which means we’re always testing out how we define this language. In Invasion!, we learned that the most powerful parts of our story were when the bunny comes to sniff you and play with you. We had audiences try to pet the bunny, and when it started dancing, they got down and danced too. Sometimes in a feature film like Deadpool, you can beak the fourth wall, but you never truly believe that Deadpool is speaking to you. But something in your animal brain in VR believes that the character is truly real.

That is something we found really exciting because, for Eric, it’s all about the audience care about the character. That’s the heart of filmmaking for him. If we can get the audience to care even more about the characters than they would normally, that’s winning. We want to experiment with even more ways to make you care about these characters so that the audience acts on behalf of the characters, not because they have to get to the next level like in a game, but because they truly care about the characters and want them to succeed.

We also want to use the funding to further develop the technology we created as a base through Series A to make it even better. I think it will allow us to make our VR experiences unique and differentiated even more so than they already are.

Was it challenging to get Invasion! picked up by almost every major VR content distributor?

[Fan]: It’s interesting, because a lot of the industry is focused on games, and it makes sense that early adopters would be gamers. But it’s funny, because we didn’t know how to categorize ourselves in the beginning. Are we a film or are we a game? We realized that we fit into both categories, but honestly, we believe that we transcend both categories. You’re in a narrative, but you are a character in a real-time game engine, and what you do actually has impact on what is happening. So you can’t say that it’s just a game nor is it just a film. This new category hadn’t been defined yet, so I think the VR industry didn’t necessarily know what to do with that. But after we put it up there and it became incredibly popular, I think that’s when distributors took even more notice. I’m sure part of the reason we were featured in the Oculus keynote is because of how well Invasion! is performing.

What are your thoughts about the premium headsets versus mobile VR?

[Fan]: We believe in both. Invasion! is available on high-end headsets, where it’s interactive and you have the bunny body—when you squat, it gets fatter. With the Vive, you can jump around and the other characters follow you. We also have eye tracking and all that activity on the high-end headsets. But we also have a ton of people who enjoy our experience on the Gear VR, and that’s a 360-degree video.

We think that both are completely viable. Of course, I do think the high-end headsets add a layer of interactivity that is amazing and makes VR even more powerful. But people still love the 360 version, and if that’s what mobile is able to get you, then it’s not for us to be snobs and say those people are wrong. I’m really excited about mobile because it allows VR to get to the masses, rather than just the high-end headsets, which are not as accessible. We believe in both approaches and in creating experiences that can work on all the different devices, because again, what we believe in is the story. If you have a good story, it should be able to translate across the different platforms.

How did the partnership with Roth Kirschenbaum Films turn Invasion! into a movie come together?

[Lee]: Basically we were showing our friends at Roth Kirschenbaum Films the experience because they were interested in VR and wanted to meet with us. Unexpectedly, after the meeting, they gave me a call and said, “Hey, what about doing this as a feature film?” Joe is extremely picky about doing animation, after having worked on the Toy Story franchise while chairman at Disney, but we saw this IP as being special. I think the idea of them putting on the headset and getting to know the characters in six minutes in a way that they couldn’t have in any other medium sold them on the strength of the storytelling and this particular universe. We are producing partners on the feature film and we’re moving forward very quickly.

screencaps_1280x720_05Is there a concern that Invasion! will lose its intensity when translated from VR to film?

[Lee]: No, we think of the mediums as apples and oranges. There are obviously things that you can learn from each. Typically in Hollywood, a lot of VR content will be created on pre-existing franchises or film properties. So it has been on the shoulders of the VR filmmakers to take that and translate it into VR. In this case, they didn’t look at this any differently than they would look at an amazing book, a classic fairy tale, or a true life story you read about in The New York Times.

As leaders in traditional cinema, we think they’re going to make movie magic while we try to make VR magic.

Do you think the success of the movie will translate into increased VR technology adoption?

[Lee]: I think that the success of our characters and this universe on any platform would. As long as whatever we do has integrity and builds upon our characters and worlds in a way that we all believe in, we think it’s win-win.