Oftentimes in life, success comes when you least expect it. This is certainly the case for Redwood City, California-based virtual reality animation startup Baobab Studios.

Co-founded in 2015 by former Zynga games VP Maureen Fan, ex-DreamWorks Animation writer/director Eric Darnell (Madagascar, Antz) and former Pixar technical director Larry Cutler (Monsters, Inc.), the studio launched its first short film Invasion! last July as a VR “experiment.”

Created by Darnell and narrated by Ethan Hawke, the six-minute all-ages film lets the viewer (via VR headset) enter the story as an adorable white bunny character that, along with a fluffy rabbit friend, must outsmart a group of bumbling alien invaders bent on taking over Earth.

“When you look down, you see a furry bunny body. When you squat, your bunny body gets fatter; and when you hop around the room, your body moves with you wherever you go,” says Fan.

“The other characters respond based on where you are. This was our first test of interactivity, and people thought the bunny was real. They would try to pet and play with it on the ground. We’re the first to actually make the viewer into a character in a non-game VR experience.”

Much to the company’s surprise, the film became a darling on the festival circuit, earning critical acclaim at Tribeca Film Festival, Toronto International Film Festival and Cannes.

On the heels of its success, Baobab was able to raise US$25 million in series B funding from investors including 20th Century Fox, Hong Kong-based Horizons Ventures, Evolution Media Partners, Shanghai Media Group and Youku Global Media Fund.

The round brought the company’s total funding to US$31 million with Comcast Ventures, HTC, Samsung, Advancit Capital, The Chernin Group, Freelands Ventures, Zynga co-founder Mark Pincus, and PayPal co-founder Peter Thiel already on board.

Interestingly, Invasion! also led Roth Kirschenbaum Films—headed by Maleficent producer Joe Roth and former Universal production exec Jeffrey Kirschenbaum—to sign a deal with Baobab for a big-screen, non-VR feature version of the short.

“We did not go out seeking a film deal. They loved the characters and the IP, which is great validation for VR storytelling,” says Fan.

Invasion! is currently available for HTC Vive, Samsung Gear VR, Oculus Rift, PlayStation VR, Google’s mobile VR ecosystem Daydream and other VR platforms.

According to Fan, Baobab’s ability to make viewers feel compassion through strong stories, character interaction and humor, along with its platform accessibility, will help the company bring VR to the masses and move beyond the early adopters.

“A lot of companies building VR are really excited about the technology, but at the end of the day, when the novelty goes away, the thing that will still appeal to all human beings is the storytelling,” she says.

“We also have to remember that very few people in the US have even tried VR, or maybe don’t want the bigger experience right away, which is why I’m really bullish on mobile VR. The biggest challenge is it’s early. It’s great that Invasion! was a hit, but we want to continue to fail. If we are not failing, it means we are not experimenting enough.”

Baobab’s newest VR short from Darnell is Asteroids!, a follow-up to Invasion! that just premiered at the 2017 Sundance Film Festival. In the film, the viewer takes on the role of a helper robot alongside the popular alien duo Mac and Cheez from the first short.

The company also has 10 additional concepts in the development hopper.