The reality of M&A for augmented and virtual reality

Despite Facebook’s blockbuster $3 billion Oculus acquisition in 2014, augmented and virtual reality has been too early stage for large scale mergers and acquisitions (M&A) so far. But that’s set to change in the next year to 18 months, so let’s look at what could drive M&A deals going forward.

Where Digi-Capital’s Augmented/Virtual Reality Report Q1 2017 and deals database tracked $1.5 billion investments in the last 12 months to Q1 2017, there was only $600 million of M&As in the same period. That dynamic of investments outstripping M&As is typical of early stage tech markets, when deal-making is all about investment for growth rather than consolidation for dominance or cost.