Continual investment in the virtual reality (VR) and augmented reality (AR) industries has fuelled the exceptional growth for several years now. And that investment doesn’t seem to be slowing down at all, in fact it’s increasing in figures from Digi-Capital’s latest Augmented/Virtual Reality Report Q3 2016.
In the report the company outlines that half a billion dollars was invested into VR and AR startups in the third quarter of this year, with the industry seeing a record $2.3 billion USD over the past 12 months. This means that Q3 2016 has seen the ninth straight quarter of investment growth from venture capital (VR) firms and corporate investors. Digi-Capital puts the average investment deals at $9.3 million (or $16.9 million when seed deals are excluded).
VR and corporate investment accounted for 86 percent for the total startup investors during Q3, these included Fidelity, Intel Capital, Soft Bank, Kleiner Perkins Caufield and Byers, Sequoia, DCM, Qualcomm Ventures, Raine, CITIC and more. But while specialist VC’s drove early investment in AR and VR growth, as the market gains traction, building confidence in mainstream investors, the likes of Amazon, Alibaba and News Corp have also joined in.
Digi-Capital sees this trend growing but also becoming broader in terms of where the money actually goes. For example secretive mixed reality (MR) company Magic Leap secured a big funding round of $793.5 million in 2016, but it took less than $4 of every $10 invested into the market. The next largest category was VR / AR solutions/services followed by video, then head-mounted displays (HMDs) still took a sizeable investment.
But in terms of where the industry is going, VR is expected to be big, but AR will be even bigger – it’ll just take longer to get there. As ever VRFocus will keep you up to date on all the latest news in the VR industry, as it happens around the world.