With the debate around AR/VR revolving around which technology will see faster diffusion and adoption, we used CB Insights data to track investment pouring into AR versus VR.
We labeled companies under these definitions:
- Augmented reality (AR): a hybrid reality that incorporates the real world with a rendered one. Magic Leap‘s headset an example in the category.
- Virtual reality (VR): a virtual world that is completely rendered. Examples here would include Jaunt, which enables cinematic VR.
- Both/Other: technologies that enable both AR and VR. An example is Eyefluence, which offers eye-tracking technology that can be applied to both virtual and augmented reality systems.
Annual trend AR vs VR
Annually, funding has flip-flopped, with far more funding going to AR in 2014 (pushed by the $542M Series B to Magic Leap in 2014) and VR winning in 2015.
VR funding grew by 391% in 2015, jumping from $95M to $465, while AR funding fell by 81% to just $125M.
AR vs VR deals
In terms of deal volume, VR also pulled away dramatically in 2015. VR went from just 24 in 2014 to 94 deals in 2015, representing 292% growth in deal volume. Meanwhile, AR startups saw a 22% decline in deals year-over-year.
AR vs VR: quarterly trends
Perhaps overshadowed by the boom in AR driven by Magic Leap, VR still enjoyed an 8% growth in dollar funding and rose to $217M in Q1’16. Large VR deals were Mindmaze‘s $100M corporate minority round, Baofeng Mojing‘s $34M Series B, and WEVR‘s $25M Series C.
AR vs VR deal volume
VR’s deal count has been above 30 for the past 2 quarters, as VR still takes the lion’s share of deals. AR and technologies that enable both AR and VR only saw a combined 10 deals in each of the past 2 quarters.
VR saw deal activity drop from 34 to 32 deals in Q1’16, which translates to a 6% drop.
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