Record Breaking $3 Billion Investments made in VR and AR in 2017

Magic Leap, Niantic and more have secured big, important investments in 2017.

Your favourite technology is getting bigger very soon. Investment records were broken in 2017 as startups secured more than $3 Billion (USD). Most impressively, is that half of the investment was made in just the fourth quarter of 2017 alone.

It’s great news for new emerging hardware and software developers in both the virtual reality (VR) and augmented reality (AR) space, as investors are clearly showing massive confidence in these new technologies.

Magic Leap, who showed off their new product last year, took just under a fifth of the total investments, after causing a massive stir when they showed their Magic Leap One for the first time. Immersive worlds developer Improbable also raised over $500 Million (USD), leading the way for UK VR companies.

The videogames category took just over a tenth of the total amount of funding, pushed over the edge thanks to an investment in Pokémon GO developer Niantic worth $200 Million USD. It wasn’t an easy win for the team though, with smaller developers in the sector raising little under 40 early stage rounds.

Categories which took less than ten percent of the share include AR and VR photo/video navigation, peripherals, social, entertainment and lifestyle – though none of these sectors could reach the scale of investment that was seen with Magic Leap and Niantic in the tech and videogames sectors respectively.

Digi-Capital have spoken to investors about how they intend to invest in the AR and VR sectors, and have found a few key points;

  • Mobile AR is very early stage, and could see $50 to $100 million exits in the next 18 to 24 months.
  • It will take time for developers to learn what works and consumers/enterprises to adopt mobile AR at scale.
  • Investors are looking for startups to dominate a vertical first, then turn that into a horizontal platform play.
  • Investors are interested in native mobile AR, not ports from other platforms.
  • Investors want startups with real-world solutions to fundamentally disrupt industries, not research projects.
  • Investors themselves could pose a risk, with the potential for over-funding during the earliest stages of mobile AR.

All of this money flowing into VR and AR development is promising, we just hope to see the fruits of the developers’ labour in time. For everything on VR and AR investments, and the latest developments in the industry, make sure to keep reading VRFocus.

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