In 2017, venture funding of VR/AR companies reached at least $1.9B, ending slightly above 2016. The total number of companies raising venture capital during 2017 outpaced 2016, but the average deal size declined sharply by 35%, according to Greenlight Insights’ annual year-end analysis of individual venture capital deals dating back to 2011.

Each year, Greenlight Insights compiles and qualifies data from private and public sources across North America, Europe, and Asia in order to assess the global venture funding landscape surrounding the VR/AR industry. In 2017, Greenlight Insights analyzed more than 300 individual deals, excluding outlier financings, such as StarVR ($5M in Q4), Unity ($400M in Q2), and Improbable ($502M in Q2).

“The aggregate increase in VR/AR venture deal activity is encouraging, but the reality is that 2017 was tough for most startups in the space,” said Clifton Dawson, CEO at VR/AR market research firm Greenlight Insights.

Similar to past years, the majority of deals in 2017 were early stage (Seed and Series A). The number of early stage deals in 2017 was up 27% YoY and 105 companies raised $2M or more from VCs. However, the average Seed and Series A deal size declined 9% and 17%, respectively.

State of VR with the Venture Reality Fund & Why They're Continuing to Invest

It may look like virtual and augmented reality’s growth spurt is abating, but it’s important to remember that companies still raised triple the amount of dollars compared to just three years ago.

“A moderating deal size of early stage companies should be viewed as a positive indicator of a healthy funding environment and partly tracks with the larger venture investment picture of 2017,” said Natalie Yue, a Data Analyst with Greenlight Insights that worked on the analysis.

The complete year-end analysis is available as a supplement to the 2017 Virtual Reality Industry Report, which was co-published with Road to VR.

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  • Matilde Constance

    The VR is getting out of fashion … ???

    • kool

      It isn’t fashionable yet…its still waiting for the lately’s to discover it and claim it as their own!

  • Mei Ling

    The header image needs to be corrected.

  • Lucidfeuer

    And wait for 2018, it’s going to get worse.

    • Elizabeth

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    • Sponge Bob

      why is it going to get worse ?

      The VR industry is on the brink of explosive exponential growth

      A few key components are still missing but will be in place by the end of this year…

      The AR will take much longer though…

      • Lucidfeuer

        By what magic, statistic or signs are you arbitrarily stating that “VR is on the brink of explosive exponential growth”, show me ONE number indicating that.

    • kool

      There will be less vr startups, but bigger publishers are getting involved.

    • Lukimator

      oh, you are still around here spouting nonsense, nice

      Do you spend your free time just looking for VR news so that you can go to the comments and make a negative remark? What a sad life that must be

  • kool

    I think its gonna be a slow growing year until the holidays. Psvr has alot of vr games hitting by the holidays so they will try to push the platform hard. Big announcements will trickle in until the summer convention season kicks in and the full story for the next year is told. This should be the year we get an onslaught of aaa games going forward. Sales should pickup as the headsets get cheaper and aaa games bring awareness. Right now we are the test dummies, we proved it works, we tested the gameplayability and we’ve made a market for it. The only way to grow the market now is to make it cheaper (which is happening) and streamline the platform. 2.0 of vr is were it will hit critical mass, but it has to be wireless, higher res, wider fov and have 6dof inside out tracking before the masses will reach for it. Until all that is affordable all we can ask for is more games.

  • Elaine Smithee

    I have a feeling VR dating is going to give these numbers a boost. As absurd as it seems, there’s a playful energy about it that seems to breathe some life into the age of online dating. Maybe not. But I saw this clip that made it seem plausible.

  • oompah

    VR headsets should be between 100$ to 130$