Why we invested in Floating Rock

Rob Vickery

As you might have heard us say in the past, we have a considerable conviction in the talent coming from the New Zealand visual effects & animation industry, which is regarded as one of the finest in the world.

We have been searching long and hard for over two years to identify a team with a vision that exceeds our expectations. Our efforts paid off when Zsombi Pirok, Co-founder & CEO of Space Rock Games (Hillfarrance portfolio company), referred us to the founders of Floating Rock Studio. 

The founders represent the highest echelon of talent at Weta Digital (recently acquired by Unity for US$1.625bn), where they created some of the most memorable scenes in modern cinema. From Thanos’ entrance in Avengers: Infinity War to Caesar’s remarkably life-like facial expressions in the Planet of the Apes trilogy, this team is truly world-class. 

As you can read in more detail in these investment notes, when we heard that they had left Weta to build a next-generation VFX studio, focusing on a cloud-based model and working extensively in the gaming sector, we dove in head first. The cherry on top was that they have already achieved a seven-figure revenue run rate without raising a cent of capital. Rare attributes indeed. 

Let’s get this show on the road

We can write about Floating Rock until the cows come home, but the best way to introduce the studio is to share their sizzle reel with you:

Meet the Founders

As with all Hillfarrance portfolio companies, our decision to invest starts and finishes with the awesomeness of the founders. The honour of funding Steph, Laurent, Garrick, Lukas, Benji, Ruby, Ibrahim, Aman, Rafael and Melanie is all ours. 


Lukas Niklaus (Co-founder)

Lukas has a rich background and experience from working as a senior animator within several VFX studios in Toronto, Montreal, Vancouver, Sydney and Aotearoa, New Zealand.

During his tenure at Weta Digital (now WetaFX), he worked on large-scale projects including Jungle Book, BFG, War for the Planet of the Apes, Avengers: Infinity War, all the way until the end of Alita: Battle Angel. He has also worked at Industrial Light and Magic on Disney’s Aladdin and Animal Logic on Peter Rabbit 2. At Floating Rock, Lukas holds the position of CFO and creative supervisor. In his spare time, Lukas spends a lot of time refining his drawing and painting skills or training Brazilian Jiu Jitsu.

Here are a few examples of Lukas’ work prior to co-founding Floating Rock:

Garrick Rawlingson (Co-founder)

Garrick was born in Aotearoa New Zealand but grew up in France. As a graduate of ESMA in France, Garrick has gone on to enjoy a dynamic career in the VFX sector. His technical expertise in modelling, sculpting, lighting and animation has enabled him to work with studios including MPC, Animal Logic, and Weta Digital. At Weta working on movies such as The Hobbit 3, Valerian, Justice League, Alita, and Battle Angel.

He has a people-centric leadership style that weaves together the Floating Rock whānau. Garrick in his leadership capacity, during the establishment phase, executed sales and customer relations, contract management, HR and talent hiring.

Here is some of Garrick’s awesome previous work:

Stephanie Parker (Co-founder)

Steff is a Canadian, raised in Pincher Creek. She was inspired by her accomplished and hardworking matriarchal whānau. Stephanie is driven, passionate and competitive and strives to succeed. She has an adventurous heart and loves travelling and discovering new landscapes and people.

Steph is an Animation Art and Design graduate of the Art Institute of Vancouver (now LaSalle). Her extensive professional career has seen her working for Wildbrain, Sony Pictures Imageworks, WetaFX, and Animal Logic. Working on Hotel Transylvania (2&3), The Angry Birds Movie (1&2), Smurfs: The Lost Village, and Oscar-Winning Spider-man: Into the Spider-Verse, Peter Rabbit 2. At Floating Rock, she is the project supervisor and animator lead and manages social and communications.

Prepare to get wowed by some of Steff’s past projects:

Laurent Herveic (Co-founder)

Laurent is a proud father and Frenchman who grew up in Paris. His early years were shaped through local artistic inspiration and influenced by contemporary euro graphic novels, US movies and comics, and Japanese anime/manga. He went on to study 3D animation at world-renowned Gobelins school.

His professional career has spanned decades of working in movies and VFX studios across many countries. Working for MPC, DNEG and WetaFX. Laurent worked as a facial modeller for Oscar-winning movies, including The Jungle Book and the Oscar-nominated War for the Planet of the Apes. Laurent is a VES award nominee in 2020 (Outstanding Animated Character in an Episode or Real-Time Project) for his work on “Pogo” from Umbrella Academy.

Laurent’s portfolio of former work, like the other founders, just blows our minds. Here are a few highlights:

Why we are believers

Floating Rock represents a high-growth global investment opportunity. They are on a mission to take advantage of the online video streaming market by positioning itself as a premium VFX and animation studio producing high-quality content. The huge market opportunity is on-target to reach a value exceeding $900 billion in the next 6 years.

The team’s collective 40 years plus of experience has laid the foundations of a successful studio that is adored by its clients. They are on a super fast-growth trajectory with five-fold revenue growth and achieving profitability to date. This is a massive milestone for such an early-stage venture and is something we are excited to see.

The demand for animation, VFX and video gaming has expanded with the increased availability of low-cost internet access, penetration of mobile devices along with the growing popularity of streaming video. In addition, the demand for Animation and VFX content to power immersive experiences such as Augmented Reality and Virtual Reality is growing exponentially.

The rapid advancement of technology has made animation, VFX & games more available, and this industry has become one of the fastest growing segments in the global media and entertainment market.

Increasingly more animation, VFX and games productions are taking place in a globally distributed mode. Production work is becoming global with countries as well as regions offering tax incentives, subsidies, financial support, regional low labour costs etc., and companies are cutting costs by setting up facilities in local and regional locations.



Illumination, the studio behind the Despicable Me/Minions franchise, has 850 globally dispersed, remote-working animators working on its features. 

VFX productions have significant time and cost-saving benefits. These productions can achieve beautiful creative outcomes and also provide time and cost savings through visualisation, enhancing planning, increasing shooting efficiency and reducing reshoots. Reducing costs in travel and location, and utilisation of virtual sets and digital assets, as these can be reused. These benefits are being realised by film studios and streaming providers more, and there is a progressive move away from traditional film production or adapting these to include VFX.

The future of online streaming consumer experiences resides in deeply engaging content and finely tuned experiences. We see global consumer attitudes and appetite for high-definition visual experiences growing with significant demand for high-quality content with VFX and realistic animation. Increasingly, consumers are accessing and watching content online via multimedia devices and spending more time streaming digital content.

The huge global market is largely dominated by streaming platforms such as Disney+, Netflix, and Amazon Prime, which spend exuberant amounts of money on VFX and animation. In 2020, the total spend on content by these streaming services exceeded $100 billion USD. To illustrate the potential growth opportunity ahead is a recent contract signing between Netflix and DNEG for $350m USD for animation and VFX services for several productions to 2025. As such, we see this as an incredibly lucrative and large market for Floating Rock to build its competitive edge and position and in turn, strong revenues.

In 2022, subscription-based video streaming services in the United States will generate revenue of $25.32 billion, up 13% from last year. The segment is projected to reach $33.59 billion by 2026. The 13% upside projected for this year is down from 19.5% annual growth in 2021 and a whopping 27% increase in 2020 as a result of COVID-19 and high consumption of content during this period.

A significant game changer is the convergence of media and gaming. It will continue to accelerate and become seamless for consumers. The photorealism of engines like Unreal 5 enables creators to explore, create, and build assets for content projects. These can be easily migrated from media to interactive games. The most successful new content productions originate from video game IP, such as The Witcher, Angry Birds, Minecraft, Pokemon, and Sonic. We see this as being a major opportunity for Floating Rock to develop its own IP content creation pipeline for both gaming and media, leveraging the multi-application of tooling, engines and platforms.

Consumer content consumption habits are changing rapidly, with viewer habits favouring short productions as a form of entertainment. Viewing habits generally favour short-form content that can be turned out quickly and cheaply. Traditional feature-length, FX-rich movie projects like the Star Wars universe are moving to 6-8 episode series that use more FX than before and of an equivalent quality level. Some eye candy/examples include:

Summary 

At Hillfarrance, we believe the future of VFX does not lie in giant companies with un-environmentally sustainable giant server farms that churn out rendered images. The future is cloud-based, clean and quick processing platforms that can meet rapid consumer demand. It has a key role in character creation and modeling processes as cloud based rendering of animation films is more effective and efficient, and reduces the time and cost compared to traditional rendering. Floating Rock is committed to the principle of kaitiakitanga (environmental stewardship) and, therefore will be cloud based to ensure their environmental footprint is minimised, and they are as efficient as possible with their energy consumption.

To close out this little ode to the next wave of VFX excellence, please join us in welcoming Steph, Garrick, Laurent and Lukas and the rest of the team at Floating Rock to the Hillfarrance Village!