A record $2.3 billion was invested in AR/VR startups last year

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  • The amount of money venture capitalists, corporate venturing arms and angel investors invested in the global augmented reality and virtual reality market more than tripled last year, jumping from $700 million in 2015 to over $2.3 billion in 2016, according to a market report from Digi-Capital.

    The augmented reality startup, Magic Leap, which is developing an AR-based head mounted display to rival Microsoft's HoloLens, raised more than any other AR or VR company last year, attracting investment of $793.5 million at a $4.5 billion valuation despite the fact it hasn’t even launched yet.

    Overall, hardware startups accounted for almost 50% of the funding pumped into the AR/VR sector, while just 4.4% ($100 million) of the investment capital went to virtual reality games companies.

    “Perhaps even more surprising was that VR/AR app developers – outside games – and VR/AR advertising/marketing startups each raised only around $80 million,” according to the Digi-Capital report. “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.”

    Less surprisingly, leading venture capital firms like Sequoia Capital, Draper Fisher Jurvetson, and Greylock Partners made significant investments in the AR/VR sector in 2016. However, the corporate venturing arms of global tech firms like Google, Amazon, Samsung and HTC, as well as leading media companies like Warner Bros, MGM and 21st Century Fox also pumped large amounts of investment capital into AR and VR companies.

    Closer to home, Immersive Tech NI, a new initiative designed to connect and support the growth of Northern Ireland’s burgeoning AR/VR sector, was also launched towards the end of 2016 with a high profile launch event and an immersive technology hackathon.

    Immersive Tech NI’s next event is due to take place at Belfast’s Crescents Art Centre this Friday, 26th May - more details here.


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