When we first talked to Librarium in May, the virtual reality education company was meeting with investors and planning a $1.5 million seed round, which it hoped to announce imminently in preparation for the company’s product launch by the beginning of the 2022-2023 school year.
Days later, the stock market dropped, and like a spigot, almost overnight the pool of investment money dried up for many startups, including Librarium.
“Right around May, June, the market took a downturn,” said Duane Mathes, CEO and founder of the Eagle-based company. “We were in due diligence with a couple of investors. All of those ended up pulling out because of the market downturn.”
But Librarium is still around, and went to market at the beginning of the school year, as planned.
“We were still able to survive,” Mathes said. “We haven’t needed it. We’re doing pretty well.”
Librarium the company
The product is what Mathes said is the world’s first virtual reality (VR) study aid designed to help students succeed at standardized tests such as the SAT, MCAT, and LSAT, using the classic “memory palace” mnemonic technique. But instead of having to visualize a location and then visualize all the individual bits of information and their locations, Librarium creates its own location as well as purple potions that, when picked up, are essentially flash cards, so users can focus on memorizing the information rather than creating the location.
“Some people have described it as ‘studying in Hogwarts,’” Mathes said.
Mathes was familiar with the memory palace technique because he used it to learn Mandarin Chinese while living in Asia. “It’s one of those languages that’s really difficult for non-native speakers and requires rote memorization,” he explained.
More recently, during the pandemic, Mathes used the technique while studying for his business degree. “I tested out of every single class,” he said.
While studying for the degree, Mathes realized it had the potential to be a great VR product. “Most people can’t really do memory palace because it takes a lot of mental discipline,” he said. “You have to train yourself on it and it takes a while to get good at it.”
So about a year and a half ago, Mathes founded a company and started working on a product for what he said is an $11 billion test prep market.
In the process, Mathes also hired a number of VR experts, including Idaho Black Box VR alumnae Jim Bradbury and Annie Morley, and has filed for patents on its technology.
Librarium the product
The product was formally announced on Sept. 8, and it includes a number of components.
First is the product itself, for a flat fee of $19.99. That lets people download or create “decks” of 20-50 cards, each of which is associated with a mnemonic prompt, and interact with them in the environment. It also includes a “fact blaster” ray gun. “You take a multiple-choice test where you shoot the answers,” Mathes said. “It’s pretty dopamine-inducing.”
Along with that, users will have access to hundreds – “hopefully, in the future, way more than hundreds,” Mathes said – of free community-generated content packs, covering topics ranging from personal finance to Greek history. The product includes a content generation tool for iOS and Android for users to create their own content to share with the community, subject to moderation.
In addition, there’s a level of premium content partners, led by Kaplan, which Mathes said has a $1.5 billion share of the test preparation market.
For example, Librarium is currently working with Kaplan’s MCAT team for a full study course of 35 decks, totaling nearly 1,000 flashcards. That product is slated to be available for $29.99. Moreover, all Kaplan students enrolled in a comprehensive tutoring, live online, in person, or on-demand MCAT course will have complimentary access to the Librarium app’s suite of offerings. Librarium is negotiating with other business units as well, Mathes added.
Librarium is also working with another partner on an SAT preparation course, as well as other topics, Mathes said.
Credentialed people can also develop coursework that they can sell, working with Librarium. “We plan to have an accredited tier – people who might be a professor of a subject – a content creator who’s risen to the top in terms of quality,” he said.
(Librarium hasn’t spoken with YouTube course provider Khan Academy yet. “That would be awesome,” Mathes said.)
And that’s how Librarium makes money. In addition to selling its product, it also gets a piece of in-app purchases, Mathes said.
One big benefit Mathes hopes to leverage is a partnership with Meta, which is not only the parent company of Facebook but also the owner of Meta Quest 2, formerly known as Oculus, one of the leading manufacturers of VR goggles.
“We were approved, very fortunately, for the curated main store when I had the opportunity to pitch this to their content teams,” Mathes said. “We’ve been working very closely with them to develop the product,” including going through design review, tight deadlines, and quality assurance. “Their QA process is really nuts,” he said.
Being listed in the Meta Quest Store brings along marketing support, including a trailer on Meta’s YouTube channel, which has half a million subscribers, Mathes said
In the meantime, Mathes hasn’t given up on a seed round, and hopes to have one next quarter in the $2 million to $2.5 million range. Thus far, the company is mostly self-funded, with some help from local companies, he said. He couldn’t comment on whether Meta was providing financial help. “We are not at liberty to discuss any of the details regarding our partnership with Meta,” he said.
This seed round will hopefully go more easily than the last one, because now the company has a shipping product and, presumably, revenue, Mathes said. “That’s a major differentiator,” he said. “When we have income coming in, that’s a much bigger deal.”
How much revenue, Mathes couldn’t reveal, but he noted that only 350 apps have ever been allowed in the heavily curated Meta Quest Store, and of those 350, more than a third of them have more than $1 million in annual recurring revenue. “It’s a very profitable place to be,” he said. “We expect to do very well.”
“Nobody has made anything like this before,” Mathes said, noting that the education category of the store has only six other applications. “I think we have a pretty solid opportunity. With a product like what we’re bringing – heavily gamified, flashy, cool – I think we’re going to blow them out of the water.”
Sharon Fisher is a digital nomad who writes about entrepreneurship.