My Virtual Head Would Look Great On Your Virtual Body! Gizmoz Merges With Daz 3D

Since Israeli startup Gizmoz launched three years ago, people have used its technology to create millions of 3D-realistic avatar heads from photos of themselves. But what good is a head without a body? Gizmoz found a body—lots of them, actually—in a Utah-based company called Daz 3D. The two companies are merging. Existing investors, led by Benchmark Capital, Highway 12 Ventures, and Columbia Capital, are put in an additional $5.3 million into the new, yet-to-be-named company. Previously, Gizmoz raised a total of $12.8 million, most recently $6.5 million in March, 2008 from the venture arm of Docomo, which also participated in the latest round. Daz 3D raised $4 million back in June, 2007, and targeted creative professionals as customers.

Daz 3D co-founder Dan Farr will become the CEO and Gizmoz founder Eyal Gever wil be president. The company will be headquartered in Utah. Daz 3D offers a free virtual studio for professional designers to create virtual bodies for video games, movies, and illustrations, whereas Gizmoz is more of a consumer play which helps people turn their photos into fun, 3D avatars.

The idea behind combining the two companies is to tackle a new market altogether: the burgeoning virtual goods economy in virtual worlds, social networks, and online video games. Except that instead of swords, armor, and clothing, the virtual goods the company will be selling the avatars themselves. “The fundamental consumption of digital goods is around characters,” says Gever. “They have the best looking bodies and we can generate any face. We can sell it to anyone out there.”

His plan is to partner with virtual worlds, games, and other online platforms to provide a complete 3D modeling engine for characters and avatars, and charge players for the ability to create realistic characters with their own faces. Good thing that trafficking in heads and bodies is a perfectly acceptable activity online.