While Digi-Capital’s AR/VR Analytics Platform tracked over $four billion AR/VR funding final 12 months, digital and augmented reality investment dropped in This fall 2019 and Q1 2020 by way of each deal quantity (i.e. variety of offers) and deal worth (i.e. {dollars} invested). The first quarter of this 12 months noticed AR/VR funding quantity (once more, variety of offers) at a quarterly degree final seen again in 2013. In the context of COVID-19’s impact on all startup investment (not simply AR/VR), this appears to be like prefer it is likely to be the beginning of at the very least a medium-term development.

It is simply too early to inform whether or not the peaks of AR and VR investment from current years may return after the coronavirus disaster has reached a decision. What might be wanted for that to occur is a VC catalyst on the size of the Facebook/Oculus deal, which in some ways sparked the present digital and augmented reality market. A possible catalyst might be Apple getting into the smartglasses market in late 2022, however as beforehand mentioned solely Tim Cook and his inside circle know if and when which may occur.

AR/VR Investment Dealflow

Virtual and augmented reality investment at 2013 levels in first quarter

AR/VR funding quantity (variety of offers) declined considerably within the final 2 quarters. Total quarterly funding quantity in Q1 2020 was at the same degree again in This fall 2013, earlier than VC curiosity within the present wave of AR/VR was sparked by Facebook buying Oculus. Categories with the best quantity of offers within the final 12 months to Q1 2020 had been AR/VR tech, schooling, video games, enterprise, medical and smartglasses. All different classes had fewer offers within the final 12 months.

VB Transform 2020 Online – July 15-17: Join main AI executives on the AI occasion of the 12 months. Register today and save 30% off digital entry passes.

Virtual and augmented reality investment at 2013 levels in first quarter

The largest variety of investments by stage within the final 12 months to Q1 2020 so as had been Seed, Series A, Grants, Series B and Accelerator. All different phases noticed fewer offers.

Virtual and augmented reality investment at 2013 levels in first quarter

As above, AR/VR funding worth ({dollars} invested) dropped considerably within the final 2 quarters, with Q1 at a degree much like Q3 2015. Again, the impression of COVID-19 on the broader tech funding market seems to point at the very least a medium-term development. AR/VR tech and social classes every raised the most important quantities within the final 12 months to Q1 2020, with smartglasses, location primarily based leisure, video games, photograph/video and life-style classes additionally important. Other classes additionally noticed funding, however at a decrease degree.

Virtual and augmented reality investment at 2013 levels in first quarter

Apart from post-IPO fairness raised by Snap, the best worth funding phases for AR/VR within the final 12 months to Q1 2020 had been so as Series F, Series B, Series A, Series C and Series D. All different phases raised decrease quantities.

Virtual and augmented reality investment at 2013 levels in first quarter

Geographically, the US and China continued to dominate AR/VR funding over the past 12 months to Q1 2020 as they’ve for a while. These had been adopted by Israel, the UK and Canada. All different nations produced much less funding.

AR/VR Investment Deals by Country and Category ({dollars} LTM)

Virtual and augmented reality investment at 2013 levels in first quarter

Mergers and Acquisitions

AR/VR has seen comparatively low M&A quantity (i.e. variety of offers) in comparison with different tech sectors as a result of early stage of the market. Apart from outliers like Facebook/Oculus, quarterly AR/VR M&A price (i.e. {dollars} paid to amass corporations) has usually remained within the tens to a whole bunch of thousands and thousands of {dollars} per quarter. Compared to different tech markets, this highlights the restricted quantity of M&A for AR/VR to this point. While this might change if there may be an inflection level in coming years, there isn’t an apparent catalyst to drive large-scale M&A within the medium time period.

Virtual and augmented reality investment at 2013 levels in first quarter

In the present augmented and virtual reality market, startups is likely to be most targeted on quick time period income technology and managing burn charges by way of 2020/2021. Leveraging VC funding to speed up development is difficult in regular occasions, however these aren’t normal times (once more, not only for AR/VR). Hopefully the strongest startups may discover a manner by way of to the opposite aspect.

(Full evaluation in Digi-Capital’s new 378 web page Augmented/Virtual Reality Report Q2 2020 and 500,000+ knowledge level AR/VR Analytics Platform at www.digi-capital.com)