Virtual reality seems to be riding a wave of success as investors keep betting big on the sector. It saw funding activity rise from $650M across 161 rounds in 2015 to $781M across 167 rounds in 2016. Early-stage funding rounds were the main drivers for the spike in funding in – growing from $49M in 2015 to $60M in 2016. The rise in series B rounds was most pronounced – the average ticket size rose from $17.7M in 2015 to $27.5M in 2016.
2016 saw quite a number of funding rounds – NextVR’s $80M series B round led by SoftBank, NetEase and others being the largest of 2016. 2016 was rife with acquisitions (15), with some big names featuring in the list of acquirers – Intel acquired Voke and Movidius, Google acquired Eyefluence, Oculus swooped in on The Eye Tribe, Snapchat bought Obvious Engineering and Facebook acquired Two Big Ears – all for undisclosed amounts. Crunchfish’s IPO was the only one of the year.
While content creation was the business model of choice for investors, VR applications seem to be the new flavour of the season – funding for the sector grew from $102M in 2015 to $245M in 2016. Of this, healthcare and fitness applications seem to be gaining traction, with social and entertainment applications trailing behind. Interactivity enablers or tools enabling interaction in virtual reality through peripherals and software through gesture detection and tracking also seems to be piquing investor interest.
Rothenberg Ventures and Boost VC were the most active investors making 25 and 22 seed investment respectively.
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