AR and VR investments reach US$2.3bn

The amount of money invested last year in virtual and augmented reality companies more than tripled compared to 2015, according to new research.

Digi-Capital’s new ‘Augmented/Virtual Reality Report and Deals Database’ said that venture capitalists and corporate investors put US$2.3 billion into AR and VR startups in 2016, compared to some US$700m in 2015.

AR firm Magic Leap took more money than any other single company in this space, raising US$793.5 million. Graphics engine Unity raised US$181 million, while 360° video firm NextVR raised US$80 million.

“300% investment growth in 12 months is impressive in any sector, let alone such an early stage market,” according to the report.

“VR hardware startups raised nearly US$200 million despite the presence of Facebook, Samsung, Google and others, and both VR/AR peripherals and VR games sectors raised over US$100 million each.

“Perhaps even more surprising was that VR/AR app developers (outside games) and VR/AR advertising/marketing startups each raised only around US$80 million. They’re going to be huge drivers of long-term value, but it looks like investor thinking is still evolving as the market develops beyond its earliest stages.”

Among the “big money” investors cited in the AR/VR report were Alibaba, Warner Bros, Google, Amazon, 21^st Century Fox, MGM, Comcast, Samsung and HTC.