Although we are undeniably in the early adoption stages, the latest numbers from the International Data Corp. project worldwide VR/AR industry revenues to be $162B by 2020. Investors are certainly chasing after that future revenue. In the first half of 2016, the VR/AR industry saw $1.3B invested over 76 deals (of which a big chunk went to Magic Leap’s Series C round in February, to the tune of almost $800M).
Although not meant to be an exhaustive list, here are the top 10 recent investments and funding events in the virtual reality and augmented reality space as we approach the close of Q3.
THE WAVE DANCES ONTO THE MUSIC SCENE AND RAISES $2.5M
Los Angeles and Austin, TX-based startup called The Wave VR is building “the world’s first social VR music platform,” according to CEO Adam Arrigo, “[and] it lets anybody from aspiring DJs to Deadmau5 to put on online virtual shows that are fully interactive. Our goal is to democratize the live music experience.” Investors in the $2.5M seed round include The Venture Reality Fund, RRE Ventures, Rothenberg Ventures, KPCB Edge, Presence Capital, and others. Notable advisors from the music side of things include Dave Haynes, formerly a VP at Soundcloud, and David Wexler, founder of LA-based Strangeloop Studios which has worked with high-profile musical acts like The Rolling Stones and Skrillex. The Wave is RAD, and I can speak from firsthand experience: we partnered with The Wave for live DJ performances at our official VRLA afterparty. Get excited: The Wave will launch later this year.
OWLCHEMY LABS LANDS $5M
Another VR startup out of Austin (keep your eyes on this area, by the way – lots of creative tech people focusing on VR/AR there) has announced funding. Owlchemy Labs, creator of popular VR titles like Job Simulator, and the Rick and Morty Simulator for Adult Swim, raised $5M. The Series A was led by Qualcomm Ventures, and also involved The VR Fund (contributors to The Wave’s round as well), Colopl Next, Capital Factory, HTC, and more. Established in 2010 by CEO Alex Schwartz, they have an impressive portfolio of titles as well as proprietary “Owlchemy VR” technology, which powers concurrent cross-platform development (which lowers creation costs). In light of the company’s existing relationship with Adult Swim, perhaps we can look forward to Aqua Teen Hunger Force in virtual reality?
NEXTVR IS ON FIRE AND CONTINUES HOT STREAK WITH $80M IN FUNDING
WOW, is NextVR on a roll… after signing deals with FOX Sports (a 5 YEAR contract) and LiveNation earlier this year, successfully live streaming notable events like March Madness and the Daytona 500, this Series B round of $80M stacks nicely on top of their previous $30.5M funding score. The Laguna Beach, CA-based company was founded in 2009, and has over 36 patents (some pending) pertaining to live streaming virtual reality technology. Their Series A round was filled with Hollywood heavy hitters including Time Warner Investments, Dick Clark Productions, and Mandalay Entertainment CEO Peter Guber – who also happens to co-own 3 pro sports teams: the Golden State Warriors, the Los Angeles Dodgers, and the Los Angeles Football Club (fun fact: Will Ferrell is also a soccer fan and fellow investor in the LAFC). All the Series A investors participated in this Series B as well, joining Asian investors such as SoftBank, CITIC Goan Information Industry Co., Chinese Internet company NetEase, China’s CMC Holdings, and more. This funding pushes NextVR to almost $120M raised in total, and their Executive Chairman Brad Allen summed it up well: “The U.S. is excited about VR. But China is even more excited about VR.”
HTC FUNDS STEEL WOOL, SOLO
Steel Wool Studios, based in Oakland, CA and founded by former Lucasfilm, Telltale Games, and Pixar creatives, received $5M in Series A funding… entirely from HTC. The VR studio will use the capital to further development of several projects which will all be around the spectrum of game and narrative-based concepts. After the April announcement of its $100M Vive X VR Accelerator program, it’s funding of Steel Wool further illustrates that HTC is investing heavily in the virtual reality ecosystem.
FROM DESTINY AND HALO TO POLYARC – $3.5M FOR VR GAME IN 2017
Earlier this year, Seattle-based Polyarc received an Epic Games Unreal Developer grant for an unannounced project, code named “Moss.” The founding team has a noteworthy past, coming from Bungie and helping create the enormously popular Destiny and Halo titles. The company is outspoken about its commitment to intuitive gameplay, and the $3.5M seed round was led by Chinese UCCVR along with Colopl VR Fund and Vulcan Capital. We’ll have to wait until the end of 2017 to experience its first game, which is expected to be released on multiple platforms.
MOVIN’ $10.3M TO BITMOVIN’S SERIES A
Bitmovin, founded in 2013, is based in Palo Alto, CA, and Klagenfurt, Austria, and provides video infrastructure for the web. Its co-founders know a bit about high-quality streaming: they created the video streaming standard that drives services like YouTube and Netflix – and makes up about 50% of peak U.S. Internet traffic. Bitmovin’s technology is called adaptive streaming; it gauges the user’s device and internet connection and intelligently adjusts the video quality in response. Bitmovin announced a $10.3M Series A round led by Atomico, along with Speedinvest, Y Combinator (of which the company is an alumnus), Dawn Capital, and notable individuals such as the founder of Unity and the former VP of engineering at Netflix and YouTube.
REAL-TIME FACES: PINSCREEN’S STEALTH $1.8M
Pinscreen, a stealth-mode startup based out of Santa Monica, received $1.8M in seed funding from Colopl VR Fund and Lux Capital. The CEO Hao Li, also a Computer Science Professor at USC, was named in Top 35 Under 35 by MIT Technology Review in 2013 and was formerly the research lead at Industrial Light & Magic/Lucasfilm – where he helped create real-time performance capture technologies. Other companies are pursuing real-time facial performance capture as well (think of Snapchat’s filters, or Face2Face, or Faceshift – which was acquired by Apple in the fall of 2015), but Li’s next-level 3D modeling technology of real people in real time claims to not require depth sensors and uses a single camera. Li also says their technology “explicitly handle[s] occlusions,” which is when a person’s face is blocked by something like hair or glasses. An interesting note here: although Li recognizes the infinite potential to games, entertainment, and communication… he says that Pinscreen itself “will create the coolest application… which is the social media platform we are developing.”
ARCHITECTURAL VISIONS BROUGHT TO LIFE WITH $1.5M SEED TO INSITE VR
Based in New York, and built on two former college roommates winning the 2014 TechCrunch Disrupt Hackthon, InsiteVR’s $1.5M seed round went to Y Combinator (of which the company is an alumnus), the GREE VR Fund, Rothenberg Ventures, Greg Castle (of Anorak Ventures), PlanGrid, and CyberAgent Ventures. InsiteVR empowers architects to communicate more effectively with clients by turning CAD files into virtual reality and better integrating 3D models into designers’ workflows. Founded by Angel Say and Russell Varriale, the company’s modeling viewer has already been used for over 4,000 projects – notably buildings like Microsoft’s Raleigh Office and Unity’s San Francisco headquarters.
HOLLYWOOD HEARTS VR: STX ENTERTAINMENT ACQUIRES SURREAL
Just a few weeks after raising funding from Asia (notably from China’a Tencent Holdings and Hong Kong’s PCCW) and other investors, Los Angeles-based STX Entertainment is expanding its multi-platform business into the virtual reality space by acquiring VR content producer Surreal. Terms of the deal were not revealed; Surreal’s co-founders, Rick Rey and Andy Vick, will stay on with the company – which will work as a separate division within STX. Surreal has produced various VR content types featuring familiar faces from Snoop Dogg to Gordon Ramsay, which they claim amount to over 70 immersive experiences that have been viewed over 35 million times. Keep an eye on this powerhouse VR creator in Hollywood, which will be no doubt producing complementary branded content in addition to novel, native VR creations.
SLIVER TV BRINGS ESPORTS TO VIRTUAL REALITY W/ $6.2M IN FUNDING
eSports is an enormous business, worth almost $900M now and expected to be a billion dollar industry by 2017. As recent proof of the staggering popularity of livestreamed eSports, the NBC Olympics viewership rates were often outnumbered by Twitch viewers. Sliver TV has joined other companies like Vreal in the quest to take eSports virtual – however, Sliver supports quite a few popular traditional titles plus the three most popular ones: League of Legends, Counter-Strike: Global Offensive, and Dota (which pull a combined audience of almost 140M viewers out of the current total 250M eSports viewers). Sliver has proprietary technology that turns 2D eSports into a VR experience, and utilizes patented arrays of “virtual cameras” in spectator mode to record live streams – which are (at this point) not available to also be viewed live. The stealth company launched an early beta for mobile VR on iOS and Android, and support for PSVR, Gear VR, Oculus Rift, and HTC Vive will be released soon. Sliver TV has raised $6.2M in seed funding from the likes of The Venture Reality Fund (yes, they’re in on this one too!), Sierra Ventures, DCM Ventures, COLOPL, and Japanese mobile gaming company GREE.
ADDITION: ISTAGING RAISES $5M TO BRING VR & AR TO REAL ESTATE INDUSTRY
Announced today, the AR and VR startup iStaging has raised $5 million in a pre-Series A funding round led by WI Harper, a VC firm specializing in cross-border investments between the U.S. and Greater China. Taya Venture Capital also participated in the round. Taiwan founded, iStaging caters specifically to the furniture and real estate industries, offering platform-specific apps for mobile devices and VR headsets to help end-users visualize and experience an environment without physically being there.
