附近上门

Although the term metaverse has been around for nearly 30 years鈥攃oined in the 鈥濃�擣acebook鈥檚 name change to in late October seems to have reignited investors’ interest in the virtual and augmented worlds that play a role in the concept.

Last year鈥檚 fourth quarter was unlike any other as far as venture interest in the VR/AR space. Nearly $1.9 billion of venture capital rolled into startups in the virtual and augmented reality software and hardware space鈥攎ore than any quarter ever, according to 附近上门 data.

That year-end bump helped make 2021 the second-best year ever for VR/AR investment with nearly $3.9 billion of venture coming to startups鈥攖railing only 2018 which saw nearly $4.4 billion thanks to some large rounds by companies like and , according to 附近上门 numbers.

Seven of the top 10 rounds last year occurred in the fourth quarter, including:

• Florida-based wearable tech maker Magic Leap raised a $500 million round in October;
• San Francisco-based , a builder of augmented reality platforms, closed a $300 million Series D in November; and
• South Korea-based 3D avatar application developer raised a Series B worth approximately $188.2 million, also in November.

Not just the metaverse

While it is easy and convenient to pin the venture funding increase in VR to a catchy term, renewed interest in the space stems from something deeper, say industry insiders.

鈥淚 think what you are seeing is the culmination of a 20-, 30-year struggle,鈥� said , president and co-founder of Van Nuys, California-based .

Sackman said improvements in VR streaming and chips have helped push the industry into new verticals. His company offers virtual reality-based therapeutic treatments to patients, and was one of those raising funding in the fourth quarter, striking a $36 million Series B in November.

, managing partner at 鈥攚hich took part in AppliedVR鈥檚 Series B鈥攕aid when he first used VR technology in 2013 he knew it was not ready for the masses. That has changed over the years as technology has improved.

鈥淩ight now we definitely think VR is something that will happen,鈥� he said.

Even though acceptance by the general public of VR is likely years away, companies like AppliedVR have proven a workable VR-related business model that does not need the metaverse or some large immersive world, Lynch added.

鈥淐ompanies like AppliedVR have shown an ability to create value prior to great mass adoption,鈥� he said.

, investor at 鈥檚 venture capital funds, said the basic concept of the metaverse is the amalgamation of one鈥檚 digital identity and their more physical place in the world. One can already see that occurring鈥攕uch as how people take their social media or gaming handle to different platforms over their real names. However, he still sees widespread adoption of life in the VR/AR as a little further off.

鈥淲e are still waiting to see the mainstream adoption,鈥� he said. 鈥淚t鈥檚 been somewhat hindered by hardware but we are seeing great progress. It鈥檚 still likely not where people thought it would be five years ago.鈥�

Enterprise adoption

When San Francisco-based went out to raise money last year, the company did not use the term 鈥渕etaverse鈥� in its pitch since it was before Meta鈥檚 announcement.

鈥淚 probably would have if it had been after,鈥� joked , CEO and founder of the company, which helps companies manage their VR and AR devices through its platform.

Regardless, the company was able to close a $4 million round it announced in December.

The company has grown from about 30 customers鈥攔anging from startups to large enterprises鈥攖o more than 100 in about 10 months, as more companies seem intrigued by the idea of using VR in aspects of things like sales, training and onboarding, Wilson said.

Just in October, , one of the largest consulting firms in the world, 60,000 Oculus Quest 2 headsets for employee training.

Like others, however, Wilson does not attribute the increase in business and investor interest鈥攕ince announcing the round he said he receives inbound venture capital interest about 鈥渆very other day鈥濃�攋ust to the metaverse.

Instead, he said he sees the renewed interest as being an offshoot of advances in VR tech, as well as improvement in the quality and affordability of the hardware.

鈥淚 don鈥檛 see it as just being about the metaverse,鈥� Wilson said. 鈥淲e are just trying to empower enterprises to use VR, not necessarily live in it.鈥�

Growing the metaverse

Similar to ManageXR鈥檚 fundraising story, when Mountain View, California-based pitched investors in the summer, it was before metaverse became a buzzword.

The company, which offers an AI developer platform for immersive realities such as the metaverse, was met with lukewarm reception by some investors, said , CEO and co-founder.

鈥淚n July, investors told us VR was not a sexy topic anymore,鈥� he said. 鈥淭hey said its time was two years ago.鈥�

The company was still easily able to close a $7 million seed round it announced in November, he said. However, since announcing the deal, Gelfenbeyn said the company consistently receives inbound investment interest鈥攕o much so it will have another announcement in the next several weeks.

鈥淭he interest is just increasing,鈥� Gelfenbeyn said.

While the chatter and headlines about the metaverse certainly help, Gelfenbeyn said he too just sees the increased interest in the space as being part of people鈥檚 desire for more immersive experiences. He points to 鈥檚 recently announced $70 billion acquisition of as further evidence of that.

鈥淭he fundamental tech trend is here for these virtual worlds,鈥� he said.

Methodology

Virtual and augmented reality software and hardware funding numbers include pre-seed, seed and all venture rounds.

Illustration: