Ecosystem Thoughts


Ecosystem Thought — April 5th, 2017

AR/VR Ecosystem Investments

Author: Steve Payne, Eric Risley, John Ascher-Roberts


Virtual reality and augmented reality have captured a high amount of interest in the past few years, and the investment environment has been robust.  BofA Merrill Lynch estimates that the VR/AR industry could reach $150 billion by 2022.  Pitchbook analysis shows $4 billion investment through 2015, and Digi-Capital tracked $2.3 billion in investments in 2016 alone.

The chart shows the largest investments to date, broken out by sector.  The biggest investment so far has been the $794 million raised in Q1 of 2016 by Magic Leap, much of which came from Google.  Removing Magic Leap from the totals, investment has been relatively evenly balanced between applications (led by games), enabling software (largely development tools) and hardware (optics and headsets).  The gaming applications sector has a very long tail, however (there are already hundreds of VR games for each of the leading platforms), so we expect that investment here has been under-reported.

The good news for investors in VR/AR is that there are many potential acquirers with deep pockets – this is a global industry, and many of the largest tech companies in the world have interests in the space.

Sources:

CNBC

Pitchbook

Digi-Capital


AR:VR Ecosystem Slide by ArchitectPartners on Scribd


For more information, please contact: John Ascher-Roberts

Contact Email: jar@architectpartners.com