Digi-Capital’s AR/VR Analytics Platform tracked $4.1 billion in AR/VR funding in 2019, the third-highest virtual reality investment and augmented reality investment 12 months on file after 2017 and 2018.

However, funding dropped considerably in This fall 2019 in comparison with the earlier quarter when it comes to each deal quantity (i.e., the variety of offers) and deal worth (i.e., the {dollars} invested). If that quarterly drop is indicative of a long term pattern, some AR/VR startups may have to deal with income technology and managing their burn charges this 12 months, fairly than leveraging VC funding to speed up progress.

Tracking the primary two quarters of 2020 could possibly be important to see the place digital and augmented reality market funding is headed subsequent.

AR/VR Investment Dealflow (variety of offers)

Digi-Capital: Over $4.1 billion invested in AR and VR in 2019

[Note: free charts do not include numbers, axes and data from subscriber version, with underlying hard data sourced directly from companies and reliable secondary sources. Specific data points are referenced in the rest of the text. Methodology in companion Augmented/Virtual Reality Report Q1 2020)]

Digi-Capital: Over $4.1 billion invested in AR and VR in 2019

AR/VR deal quantity (once more, variety of offers) seemed prefer it had stabilized in Q3 2019, however it declined considerably within the fourth quarter. Total funding quantity dropped by 27% in 2019 in comparison with 2018.

Categories with the best quantity of offers within the final 12 months had been AR/VR tech, video games, training, smartglasses, medical, enterprise software program/providers (ex-hardware) and options/providers. All different classes had fewer offers final 12 months.

AR/VR funding worth (once more, {dollars} invested) in 2019 noticed a decline of 35% from 2018. As above, deal worth dropped considerably in This fall 2019 in comparison with the earlier quarter, which along with a decrease Q1 2019 led to the drop in general funding for the 12 months.

AR/VR tech and social firms dominated deal worth, with smartglasses, location-based leisure, and video games additionally vital in 2019. There had been investments at a decrease stage in different classes, too.

Digi-Capital: Over $4.1 billion invested in AR and VR in 2019

The largest quantity of investments by stage in 2019 got here from Grants, Seed, Series A, Accelerator, Crowdfunding. and Series B rounds. All different phases noticed fewer offers over the course of the 12 months.

Apart from Snap’s post-IPO private placement final 12 months, the best worth funding phases for AR/VR in 2019 had been Series F, Series A, Series C, Series B and Series D. All different phases raised smaller quantities.

Digi-Capital: Over $4.1 billion invested in AR and VR in 2019

When it involves deal sizes in 2019, funding rounds within the $500 million to $1 billion, and $100 million to $500 million ranges dominated {dollars} invested. These had been adopted by $10 million to $50 million, and $50 million to $100 million measurement offers. Early stage rounds at decrease ranges rounded out the combo final 12 months.

Digi-Capital: Over $4.1 billion invested in AR and VR in 2019

Geographically, the U.S. and China continued to dominate AR/VR funding in 2019 as in earlier years. These had been adopted by Israel, the U.Okay., and Canada. All different nations noticed decrease ranges of funding in AR/VR final 12 months.

Digi-Capital: Over $4.1 billion invested in AR and VR in 2019

AR/VR has seen comparatively few M&A offers in comparison with different tech sectors to date, with round $700 million of M&A offers final 12 months. The largest variety of M&A offers in 2019 had been in AR/VR options/providers, video games, smartglasses, tech and way of life, in addition to a spread of acquisitions throughout different classes. Apart from a few massive offers, quarterly AR/VR M&A worth (i.e. {dollars} paid to accumulate firms) has remained within the tens to a whole lot of tens of millions of {dollars} per quarter since 2014.

While there could possibly be an uptick in AR/VR M&A exercise if a market inflection level occurs in coming years, there isn’t an apparent catalyst for large-scale M&A within the quick time period.

Digi-Capital: Over $4.1 billion invested in AR and VR in 2019

With AR/VR getting into a probably transitional 12 months in 2020, solely time will inform whether or not funding developments from late 2019 proceed (or not). Market catalysts can transfer markets, as Facebook did again when it purchased Oculus in 2014. Macro elements like COVID-19 might additionally play a big function in tech market funding extra broadly (not simply AR/VR). So will probably be fascinating to see what occurs within the first half of the 12 months, and whether or not the AR/VR offers market surges or stays at its present stage.

For extra element and knowledge, see Digi-Capital’s new 370 web page Augmented/Virtual Reality Report Q1 2020 and 500,000+ knowledge level AR/VR Analytics Platform.