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AR and VR companies have raised $248M so far this year

Investments in augmented and virtual reality are rising as the space begins to go mainstream

Financial trends and news by Steven Loeb
August 7, 2015
Short URL: http://vator.tv/n/3f63

Virtual reality and augmented reality are going to be, as the Donald would say, "yuge." (Sorry, I just got done watching that debate, so I have Trump on the brain). While they are nowhere near there yet, we are already seeing signs that these spaces are already seeing more activity.

In the second quarter of this year, the virtual reality and augmented reality spaces saw $131 million raised in 34 deals, according to data out from CB Insights. While that is an increase in terms of dollars raised quarter-to-quarter, up from $117 in Q1, it was down in terms of deals, from 25.

In the first half of 2015, there have already been $248 million invested in 41 deals; that is a major improvement from the first half of 2014, which saw only $93 million and 23 deals. 

Impressively, both quarters this year were the first ever to surpass 15 companies raising money, and were among the most money raised as well, though these are not the biggest quarters ever. There are still two that raised more, but it's tempting not to count them since they were each influenced by a few giant deals, rather than the space itself maturing.

The biggest quarter, by a long mile, was the fourth quarter of 2014, which saw a whopping $626 million raised. The problem is that was almost all raised by one company, Magic Leap, which took $542 million in October of last year from Google Qualcomm Ventures, Legendary Entertainment, including a personal investment from CEO Thomas Tull, KKR, Vulcan Capital, Kleiner Perkins Caufield & Byers, Andreessen Horowitz, Obvious Ventures, and other investors.

The other big quarter was the fourth quarter of 2013 (what's with the end of the year being a hot time for big VR deals) , which saw two big deals: first Oculus, which raised $75 million, before being bought by Facebook a new months later, and then LensAR, which raised $87 million

The fact that the number of deals has stayed relatively stable, yet the amount of money being put into these companies has gone up, are signs of a space that perhaps maturing a little bit.

The companies that are the most funded in this space are the ones I just mentioned, Magic Leap, which has $590 million, and LensAR, which is the only other company to raise over $100 million.

Other companies on the list include some in the hardware support space, like Matterport, Movidius, Leap Motion and Meta, as well as mobile software, with NantMobile.

As for who is funding these companies, the biggest investor so far is Rothenberg Ventures, which has made investments in more than 10 companies. Google Ventures and Intel Capital were the most active corporates in the space, tying with Andreessen Horowitz and TechStars for second place.

The future of VR and AR

First, for those who don't really know, here is the difference between virtual reality and augmented reality.

VR is closed and fully immersive, while AR is open and partly immersive. Where VR puts users inside virtual worlds, immersing them, AR puts virtual things into users’ real worlds, augmenting them. Basically VR is something you wear on your face, like Oculus VR, while AR is like wearing something along the lines of Google Glass, where you will still be able to walk around and see the real world around you.

Those difference will affect how AR and VR are used differently. The biggest seller of AR will be in hardware, along with aCommerce, and data, while VR will be dominated by gaming, hardware, film, theme parks and "niche markets."

The two spaces, together, are expected to be worth $150 million by 2020, up from what looks to be around $5 billion in 2016. And, given its more practical useage, AR be dominating VR, $120 billion to $30 billion. 

(Image source: denofgeek.us)


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