- AR and VR tech has a vast array of use cases including surgical training, gaming, and e-commerce.
- Startups in the red hot industry attracted a record $7.2 billion from VC funds in 2021, per Dealroom.
- We profiled 14 VR and AR startups that are primed to take off, according to top VCs.
For years augmented reality and virtual reality were viewed as a niche set of technologies that were reserved for entertainment.
Gaming companies like Roblox and Improbable dominated the AR and VR market but wider use cases have grasped investors’ attention as the technologies promise to shake up everything from medical training and construction to online shopping and conferences.
The promise of widespread adoption spurred Mark Zuckerberg into renaming the Facebook holding company to Meta to emphasize his desire for the business to lean heavily into a metaverse-based future. Elsewhere, Apple is reportedly on the cusp of unveiling its own mixed reality headset that is poised to combine both AR and VR into the same device.
VR uses sensory and haptic technology to simulate real-life experiences in a completely virtual environment, which can usually be accessed via a headset. By comparison, AR adds to a user’s existing environment and can be accessed through a phone or eyeglasses instead of a headset. Images and animations are superimposed on real objects so that the two worlds co-exist.
Investor appetite for AR and VR startups hit an all-time high last year, raising $7.2 billion globally, per Dealroom data.
“Much of what makes up the metaverse will not be wholly decoupled from our offline world,” said Andrew J Scott, founding partner of 7percent Ventures, a VC firm that invests in AR/VR startups. “We believe that companies which connect both worlds will be big.”
David Ripert, the founder and CEO of Poplar, an AR marketing startup for e-commerce retailers, believes there is more momentum in Europe following the pandemic, despite the US largely dominating funding to date.
Recently, Europe-based FOV Ventures launched a new fund for startups operating in the metaverse — the first of its kind on the continent as the industry attracts more investor attention. With VCs pouring $4.4 billion into AR and VR startups in the first quarter of this year, 2022 is looking to be a lucrative year for the sector.
Insider asked top VCs to share the up-and-coming AR and VR startups to watch and profiled 14 of them.