AR/VR Dealmakers invested over $800M in Q2 2017 July 5, 2017

AR/VR Dealmakers invested over $800 million dollars in Q2 2017, after a quieter first quarter. This rounded out over $2 billion invested across 27 AR/VR sectors in the last 12 months, as analyzed in Digi-Capital’s new 167 page Augmented/Virtual Reality Report Q3 2017 and 700 transaction 2011 to 2017 Deals Database (with major mobile AR update post-Apple/Facebook – also see Digi-Capital mobile AR YouTube channel). While investment hasn’t hit the record peak of Q1 2016 (when $1.2 billion was invested in the quarter and $2.4 billion in the previous 12 months), the second quarter of this year was an investment record for a quarter when Magic Leap wasn’t sucking in giant amounts of cash.

The now familiar pattern for AR/VR investment saw the highest volume of investments from pre-seed through Series A, with chunky later stage deals accounting for most of the dollar value in the quarter (Improbable over $500 million, Unity $400 million – reported as half investment and half secondary share sale by employees). However Facebook’s Camera Effects Platform and Apple ARKit for iOS (and potentially AR optimized iPhone 8 later this year) look set to recalibrate investor sentiment on the sector as a whole. That shift in thinking might take a little while to filter through to the mobile AR developer ecosystem as it spins up to speed, so watch this space.

Previous readers will notice that we’ve refined our sector analysis in the new report significantly, with more granular sector-by-sector detail and analysis of over 630 AR/VR companies and the hundreds of investors supporting them. One pattern remains constant for AR/VR Dealmakers, with half of all investment continuing to pour into core tech companies. The four other big investment sectors were video, games, peripherals and smartglasses, which together with tech account for just under 90% of all AR/VR investment.

Around $1 of every $10 was divided between solutions/services, education, social, advertising/marketing, navigation, location based, and eCommerce. The rest was spread across the smaller investment sectors of art/design, entertainment, business, lifestyle, music, enterprise/B2B, utilities, news, medical, sports, photo and distribution. Again as the impact of Facebook and Apple filters through the mobile AR startup ecosystem, an explosion of new app types (tweeted daily by @DigiCapitalist) could lead to a rebalancing between investment sectors.

With Digi-Capital forecasting over a billion users and $60 billion revenue for mobile AR in 5 years time, the revolution started by Apple, Facebook, Google and others is set to change how the world sees the world. For AR/VR Dealmakers and their portfolio companies, picking the right opportunity with the right timing today could make them the geniuses and visionaries of tomorrow.

[Digi-Capital’s major revised AR/VR industry report and forecasts with new mobile AR sections & upgrades is here, including industry dynamics, market segmentation, competition, hardware technical benchmarks, sector analysis, installed base forecasts, sector, geographic & business model revenue forecasts, investment/M&A analysis, early stage revenue models, VC approaches, major company implications and 630 AR/VR company overviews, investments & acquisitions. Covers AR/VR hardware, data, voice, eCommerce, consumer apps, games, video, enterprise, advertising, plus bundled AR/VR investment/M&A deals database with 700 transactions]