Funding: GeekWire/Road to VR (~$294M across six rounds; Coatue, Sequoia, Index, Madrona)
Current status
Shut down Jun 1, 2026; Snap bought select assets and moved some staff into its Specs AR-glasses unit, terms undisclosed
The rise & fall
10 moments · 2016–2026
The key moments, with employee sentiment along the way.
Apr 2016
🌱
Apr 2016
Six HoloLens engineers quit Microsoft to found Against Gravity
Nick Fajt, Cameron Brown, Dan Kroymann, Bilal Orhan, Josh Wehrly and John Bevis leave Microsoft's HoloLens team; the first Rec Room ships on Steam for the HTC Vive on June 1, 2016, built in 99 days, and a $5M seed from Sequoia and others follows.
Voices of VR / GeekWire
Dec 17 ’20
Dec 17 ’20
Pandemic hangouts: $20M Series C led by Madrona
Madrona leads, with Sequoia, Index, First Round and DAG; 10 million registered users, an audience that tripled in a year of lockdowns, four million player-built rooms. Total raised is still just shy of $50M.
TechCrunch
Mar 24 ’21
🦄
Mar 24 ’21
The first VR software unicorn: $100M at $1.25B$1.25B
Sequoia and Index lead, Madrona joins, as Rec Room passes 15 million lifetime users, 2 million creators and 566% year-over-year revenue growth — the first VR software company to reach $1B.
TechCrunch
Dec 20 ’21
📈
Dec 20 ’21
The peak: $3.5B, nine months after the first unicorn round$3.5B
Coatue leads a $145M round at $3.5B post-money, Sequoia, Index and Madrona along, with 37 million users, 12 million player-made rooms and $294M raised across six rounds.
TechCrunch / Road to VR
Mar 3 ’25
Mar 3 ’25
16% of staff cut; no more fundraising assumed
CEO Nick Fajt's memo blames slower gaming growth, higher interest rates and a harder fundraising climate, and says the company must become self-sustaining on the cash it has rather than plan on another raise.
GeekWire
Aug 25 ’25
Aug 25 ’25
Half the company goes: 141 jobs, ~310 down to just over 100
A WARN filing puts the cut at 141 jobs, about 310 people down to just over 100. The founders' memo says the company was too small for its build-anywhere vision and too big to pivot; it kept ~30 cents per UGC dollar versus 70 on its own items.
GeekWire / Company blog
2024–26
💬
From the inside · Glassdoor reviews, 2024–26
Glassdoor reviews traced the drift from inside: across 2024-26 more than ten employees described priorities that changed by the week and teams reorganized every few months; several said growth had outrun revenue, and nearly all, right up to August 2026, still praised the colleagues and benefits they left behind.
Mar 30 ’26
Mar 30 ’26
Shutdown announced; Snap buys select assets the same evening
The company blog says it never found a sustainably profitable model despite 150M+ players. Snap confirms it has acquired select assets and is hiring some staff into Specs Inc., its AR-glasses subsidiary; no price disclosed and no plan to keep the platform.
Company statement / GeekWire
Jun 1 ’26
🪦
Jun 1 ’26
Servers dark at noon Pacific — joins the Unitard Club 💔
Logins end, rec.net goes offline and Rec Room Studio's build servers stop at 12:00 PT after a decade, 150 million players and $294M of venture money. Players got export tools and a final 'report card'; a fan tribute video and Reddit farewells mark the end.
Company statement / GeekWire
Jun 1 ’26
Jun 1 ’26
Founder-CEO resurfaces at Snap; ex-staff run a jobs board
Nick Fajt lists himself as a director of product management at Snap; a 'Rec Room Grads' site lists former engineers, moderators and trust-and-safety staff looking for work, alongside those already placed elsewhere.
GeekWire
$3.5Bof peak value erased · 10 years
💬 entries paraphrase anonymous, unverified reviews posted publicly on Glassdoor ↗; dated facts carry their source.
How it happened
Rec Room was a Seattle social-gaming platform where players built and shared games and hangouts across VR headsets, PCs, consoles and phones. Six Microsoft HoloLens engineers — Nick Fajt, Cameron Brown, Dan Kroymann, Bilal Orhan, Josh Wehrly and John Bevis — left in early 2016 to found it as Against Gravity and shipped the first version on Steam that June.
Pandemic-era demand for virtual hangouts took it to 15 million lifetime users; a $100M round from Sequoia and Index in March 2021 priced it at $1.25B, the first VR software unicorn, and nine months later Coatue led $145M at $3.5B post-money with Sequoia, Index and Madrona along. $294M went in over six rounds.
The economics never caught up with the audience: it kept only about 30 cents of every dollar of user-generated-content sales after platform fees and creator payouts, and its bet on letting anyone build on any device buried it in millions of low-quality mobile and console creations that added moderation and infrastructure costs while those platforms never produced strong results.
It cut 16% of staff in March 2025 and roughly half of what remained that August — 141 jobs, about 310 people down to just over 100 — the founders conceding they were too small for the build-anywhere vision and too big to pivot.
On March 30, 2026 the company said it would close for good, having 'never quite figured out how to make Rec Room a sustainably profitable business.' Snap confirmed that evening it had bought select assets and was hiring some of the team into Specs Inc., its AR-glasses subsidiary, on undisclosed terms, and did not take the platform.
Rec Room shipped export tools so players could keep their creations, then went dark at noon Pacific on June 1, 2026, after more than 150 million lifetime players. Fajt resurfaced at Snap as a director of product management.
Source: TechCrunch/Road to VR: $145M at $3.5B post-money led by Coatue, Dec 2021; $100M at $1.25B led by Sequoia and Index, Mar 2021; company blog (Mar 30, 2026): shutdown announced, platform off Jun 1, 2026; GeekWire: Snap bought select assets on undisclosed terms; $294M raised across six rounds
