transfr Secures $12M Series A to Revolutionize Manufacturing with VR

The coronavirus pandemic has resulted in widespread job losses throughout the nation. For businesses to recover, a focused and sustainable approach to workforce re-skilling is crucial. However, the financial commitment to training and recruitment – often reaching hundreds of thousands of dollars – presents a significant challenge for companies, particularly during periods of economic uncertainty.

Bharani Rajakumar, the founder of Transfr, believes that virtual reality technology offers an ideal solution to address the needs of displaced workers. Transfr utilizes virtual reality to develop realistic simulations of manufacturing environments and warehouses for training applications. This platform provides workers with a secure and effective method for learning new skills, while simultaneously offering companies a scalable solution for up-skilling their employees.

Rajakumar describes Transfr as establishing a “pipeline from education to employment.” Companies can tailor the training to their specific requirements, and students can transition into entry-level positions through vocational schools, on-site programs, or dedicated training centers. Below is a presentation from the company detailing the trainee experience.

The foundation of Transfr’s offering is its software. In terms of hardware, the company utilizes the Facebook Oculus Quest headset, specifically the Oculus for Business version, rather than the standard consumer model.

Transfr generates revenue through a software-as-a-service licensing model, with fees reaching up to $10,000 depending on the size of the client’s workforce.

Initially, Transfr began as a VR training provider offering mentor-led courses covering a diverse range of skills, from bartending to surgical techniques, as illustrated below:

According to Rajakumar, the strategic shift towards assisting displaced workers stemmed from identifying which party held the greater purchasing power in the context of entry-level employment. The answer was the companies that stood to benefit most from a more highly skilled workforce.

The coronavirus pandemic has generally improved the perception and acceptance of virtual reality technology, although widespread adoption within the edtech sector has not yet occurred. Rajakumar anticipates that it has the potential to be transformative for the industry. He first encountered virtual reality while attending a gaming convention in San Francisco in 2017.

“It’s surprising that gaming and pornography are the dominant industries for this technology,” he remarked. “I don’t believe anyone fully appreciates its potential for teaching and learning.”

Labster, a company providing schools with VR simulations for science education, experienced a fifteen-fold increase in product usage since March and secured funding in August to expand into the Asian market.

Michael Jensen, CEO and co-founder of Labster, commends Transfr’s engaging gamification and user experience, but points out that the high cost of production could pose a significant obstacle to the company’s scalability.

“Developing a robust and refined VR application remains expensive, and all companies in this space – including ourselves – must prioritize reusability, testability, and scalability to achieve lasting success.”

Transfr is working to reduce costs by building a comprehensive library of work simulations, essentially a virtual reality training center, that can be adapted for different clients. By continually adding new, in-demand job simulations each month, the company can scale its operations without needing to begin from scratch for each new customer. Since March, Transfr’s customer base has grown fourfold.

A particularly noteworthy achievement is Transfr’s recent project in Alabama. The company is supporting a statewide initiative in Alabama, with its software being implemented within the community college system and the industrial workforce commission for re-skilling programs. These large-scale contracts are key to Transfr’s ability to expand and fulfill its mission of workforce training. Rajakumar aims to secure 10 to 15 comparable contracts within the next year.

This is an ambitious objective, and one that warrants additional funding. Transfr announced today that it has raised $12 million in a funding round led by Firework Ventures. These funds will be primarily allocated to expanding Transfr’s catalog of virtual reality simulations. While the company is not currently profitable, Rajakumar states that Transfr “could be” profitable if they chose to pursue a slower growth trajectory.

“Prior to COVID, people viewed us as benevolent for our work in workforce development,” he said. “In a post-COVID world, people recognize that we are essential.”