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AR and VR investments reach US$2.3bn

Virtual reality VR Edinburgh Digital Entertainment FestivalThe 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, 21st Century Fox, MGM, Comcast, Samsung and HTC.