Q1 2016 VC investment in AR/VR 45% higher than previous quarter



Almost $1.2 billion was invested by VCs in AR/VR in the first quarter of 2016, with around $800 million going into Magic Leap. To put this in perspective, $1.2 billion dollars is 25x the level of AR/VR investment 2 years ago in Q2 2014.

Even without Magic Leap’s monster round, the remaining Q1 2016 investment was 45% higher than the previous quarter. The leading AR/VR investment sectors in the last year were AR/VR hardware, video, solutions/services, games, advertising/marketing, consumer apps, distribution, tech and peripherals.


Despite the early stage of the market, there are already 4 AR/VR unicorns including Magic Leap ($4.5 billion), Oculus ($2 billion), Blippar ($1.5 billion) and Mindmaze ($1 billion). VCs and corporates in both the US and China have developed a laser like focus on AR/VR, with investment now coming from both dedicated AR/VR funds and the cream of Sand Hill Road investors. Increased investor competition also means that AR/VR rounds are increasing in both size and valuation. Despite what is happening in the broader tech investment market, AR/VR investment just got real.

CB Insights:


With the public increasingly exposed to now-available consumer VR headsets like the Oculus Rift and HTC Vive, investment has poured into the category, with $1.1B in funding to startups in this space in Q1’16, across 41 deals.

Despite seeing deal activity jump 125% in the year, 2015 saw funding pull back 11%, down to $699M. (Funding totals in 2014 were buoyed by Magic Leap‘s $542M Series B mega-round.)

But 2015 still saw plenty of large deals including Jaunt ($65M Series C), ANTVR ($46M Series B), and Movidius ($40M Series E).

Update: ABC News 1991 report on virtual reality