Virtual and augmented reality investment at 2013 levels in first quarter

While Digi-Capital’s AR/VR Analytics Platform tracked over $4 billion AR/VR investment last year, virtual and augmented reality investment dropped in Q4 2019 and Q1 2020 in terms of both deal volume (i.e. number of deals) and deal value (i.e. dollars invested). The first quarter of this year saw AR/VR investment volume (again, number of deals) at a quarterly level last seen back in 2013. In the context of COVID-19’s impact on all startup investment (not just AR/VR), this looks like it might be the start of at least a medium-term trend.

It is too early to tell whether the peaks of AR and VR investment from recent years might return after the coronavirus crisis has reached a resolution. What could be needed for that to happen is a VC catalyst on the scale of the Facebook/Oculus deal, which in many ways sparked the current virtual and augmented reality market. A potential catalyst could be Apple entering the smartglasses market in late 2022, but as previously discussed only Tim Cook and his inner circle know if and when that might happen.