What specific Ubuntu version are you running in a VM? If you run the
command:
ls -la /lib/modules/`uname -r`/kernel/net/ipv4/ipip.ko
Do you see the ipip kernel module? For example on my machine, I see:
--
$ ls -la /lib/modules/`uname -r`/kernel/net/ipv4/ipip.ko
-rwxr--r-- 1 root root 15984 Dec 7 2014
/lib/modules/3.17.5-1.ax25.el6.x86_64/kernel/net/ipv4/ipip.ko
--
--David