© 2017 The Texas Lawbook.
By Natalie Posgate
(May 12) – Austin-based video game developer Owlchemy Labs this week scored the gold mine that any tech startup looking for an exit would dream of: an acquisition by Google, the mother of all tech giants.
The score occurred not in one of the company’s state-of-the art games, but what gamers call “IRL” – “In Real Life.”
Lawyers from all of Andrews Kurth’s Texas offices navigated the deal for Owlchemy, considered a pioneer in virtual reality, or “VR,” games.
Leading the deal for Owlchemy was Austin corporate partner Alan Bickerstaff, who first got hired by Owlchemy over a year ago after being introduced to Owlchemy’s founders through another entrepreneur client and friend.
“They liked us, liked our story and what we do,” said Bickerstaff of his firm, which Pitchbook recently named as 2016’s most active venture capital law firm in the South.
The Andrews Kurth deal team also included Austin associates Cassandra Cuellar, Matt Wade and Jae Kim; Houston partner Tony Eppert; Dallas partners Will Becker and Isabel Crosby and associate Stephanie McDermott; Woodlands associate Emily Cabrera; Austin of counsel William Dillard; Austin partner Lisa Montgomery Shelton; and an attorney in the firm’s Washington, D.C. office.
Founded in 2010, Owlchemy is best known for its award-winning VR game Job Simulator. Its latest game is Rick and Morty Simulator: Virtual Rick-ality. Owlchemy’s games are configured for gamers using the HTC Vive, Oculus Touch or PlayStation VR.
Aside from the benefits this deal brings to Owlchemy, which will have access to significant financial resources by being a part of Google, Bickerstaff said this deal has a broader significance for the Austin tech startup community and the ever-growing VR space.
“I think it shows that companies that develop good content and have a loyal following are going to attract interest both from additional customers and buyers looking particularly in the VR space,” he said. “As Austin continues to be a hot hub for entrepreneurs… it also shows another example of an Austin, Texas company attracting attention from Silicon Valley giants and buyers all over the country.”
Owlchemy only went through one round of venture capital funding, which Andrews Kurth handled in August of last year. In that Series A financing round, Owlchemy secured $5 million from a group of high-profile investors including Qualcomm Ventures and HTC. Bickerstaff said Owlchemy is unique because it had built up so much for itself before ever receiving funding from outside investors.
“The founders are a couple of entrepreneurs who really worked hard and bootstrapped the company for a long time,” he said. “They had good products and good customer contracts and revenues before they ever raised money. They did a really good job of working hard to build their business without having to necessarily raise capital.”
Other than VR, Bickerstaff said he is also noticing tech deals involving medical devices pick up – especially with Houston’s strong Texas Medical Center and Austin’s new Dell Medical School.
“Overall I think the tech market is still healthy and doing well,” he said. “There are lots of entrepreneurs and lots of innovation. Austin has always done well in the medical device space, certainly in terms of spinal implant companies. I think you’ll see a lot more of that in Texas – [certainly] in Houston and Austin.”
Terms of the Owlchemy-Google deal, including the transaction value and Google’s outside lawyers, are confidential.
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