Still think virtual reality is a fad? The latest data suggests over $136M was raised by VR startups in the month of November 2015 alone. It appears that VR is quickly leaving the realm of odd curiosity and is now forming a foundation and financial base for a legitimate standalone VR industry.


ben smith winnick and coGuest Article by Ben Smith

Ben is an active investor in VR and digital media, and is based in Los Angeles. Ben was an early Google and YouTube exec, and has founded and led multiple venture backed video startups. His monthly profiles on “why people are great at what they do” are found here.


VR market intelligence firm Greenlight VR tells Road to VR that more than $136 million was invested into virtual reality in November alone, and that’s excluding crowdfunding and private deals. For comparison, that figure is slightly more than the total raised ($132 million) in aggregate by “pure-play” VR companies in July, August, and September combined.

Here is a chart of the top ten companies who raised in November (data courtesy Greenlight VR):

november vr investments greenlight vr

You’ll notice that the funding skews top-heavy, with companies like NextVR and CCP Games raising healthy amounts of additional capital. The implication is that existing VR companies have been successful in securing the resources they need in order to make the big potential VR land grab. Likewise, seed investment with new companies toward the bottom of the list suggest that investors still believe there is lots of room to play and compete in this young industry.

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If you throw in the New York Times including a free set of Google Cardboard to every print subscriber in November, it feels like the VR ecosystem is more than primed to explode into consumer’s homes in 2016. The VR startups I invest and advise also anecdotally report consumer and corporate interest in VR technology is in line with the higher level of investment we’re seeing in Q4 2015. Everybody is simply trying to keep up with interest and demand.

What does this mean in the big picture for VR? Already frothy total addressable market projections may need to be recalibrated to incorporate these strong November numbers. When looking at market comparables, we may need to begin to look beyond online video comparisons, and start to peek at how VR investment parallels early investment in the mobile industry.

See Also: Here We Go (Again) – The VR Industry Is Spinning up Just like Online Video 10 Years Ago

If this is a fad, virtual reality sure is going to be an expensive fad for many investors and large corporations around the world. At this point, it’s more likely we’re witnessing the beginning of a seismic multiyear shift in consumer technology platforms.

As the countdown to the launch of major VR headsets becomes shorter and galvanizing, look for these recent VR investment dollars to be deployed in helping consumers more quickly adopt the new technology and foster discovery of amazing virtual reality use-cases. The pressure will be on to get consumers on these platforms at a faster rate than ever. But for now, it’s happy smiles all around for VR startups—Christmas just came a month early, and December is already off to the good start.

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4 COMMENTS

  1. When steam power was first utilized, people thought it was just for toys. Engineers produced whirling copper devices for the upper class that were a joy to watch but for most was not worth the cost.
    It took visionaries to grasp hold of a simple concept and apply it to a larger scale and create steam motors.
    I agree with Bob. This has higher potential than just toys and games. This could be a massive boon for unmanned robotic missions; comfort for people restricted to long term solitude such as deep space travel, providing immersive standardized education, medical exploration and quality of life enhancements for people with limited mobility.
    VR technology at its heart is remote viewing. It is offering the ability to take our eyes places they may not be able to go in a way that 2D camera cannot offer.

  2. I agree with the sentiments that the potential is far greater than entertainment, however I’d advise against being too dismissive of the entertainment sector.

    This is a space where frankly game developers are better qualified to push the technology and solve usability issues than university or defense lab technicians are. This is fundamentally video game technology being applied to another purpose.

    Hell, it’s highly unlikely there’d even be a VR market right now were it not for the early success of the Oculus, driven almost entirely by gamers.

    • Exactly! VR has existed primary in military and research application for years and where has that gotten anyone? The entertainment sector is what’s driving VR to unforseen heights. Hell, Palmer did, in his own home workshop, what research and government grants hadn’t done in decades. I know that mobile technologies came along at just the right time and it was bound to happen eventually but Oculus started this new VR revolution and entertainment was their goal at the start.