Riding the Augmented Reality Wave

A record $2.3 billion was invested in augmented reality (“AR”) startups in 2016, representing a three-fold increase from the $700 million invested just a year earlier.¹

AR hardware saw the largest investment, securing nearly 40 percent of total dollars. Key deals included $794 million raised by Magic Leap and capital raises by other AR hardware players, including ODG at $58 million, Meta at $50 million and Lumus at $45 million. The second largest investment area came in the AR services and solutions arena (including a $181 million investment in Unity, or nearly 20 percent of investment, the provider of a top game development platform and community.) Finally, AR apps also experienced large investments, driven by a $54 million raise by Blippar, a company that provides an AR mobile app and self-service suite of tools.²

Overall, the vast majority of investment in AR occurred at the top of the technology stack, as seen in Figure 2. In the future, as AR capabilities and communities become well-established, we anticipate the System Integration layer of the stack – creating integration of ecosystems – will be a focus investment area play.