The virtual reality (VR) sector has seen a lot of buzz in the news lately. Its applications can be observed in all industries from health to entertainment to real estate. In addition, we’ve analyzed that its funding and exit momentum has experienced significant growth in recent years.
We will now take a closer look at the different components of the VR sector and how they make up this startup ecosystem. We have classified the companies into 13 categories. This blog post will illustrate what these categories are and which categories have the most companies. We will also compare the categories with one another in terms of their funding and maturity.
Let’s start off by looking at the Sector Map for the VR sector. We have classified 750 virtual reality startups into 13 categories that have raised $10 billion. The Sector Map highlights the number of companies in each category. It also shows a random sampling of companies in each category.
We see that Virtual Environment Content is the largest category with 286 companies. These companies create or present computer-generated spatial simulations for the user to experience. Such environments include virtual reality video games, learning platforms, and socializing platforms. Some example companies are VRstudios, Survios, VREAL, and Reality Reflection.
We have seen what the different categories making up this sector are and the number of companies in each. What about their funding and maturity in relation to one another? Let’s look at our Innovation Quadrant to find out.
Our Innovation Quadrant divides the VR categories into four different quadrants.
We see that the Pioneers quadrant has the most virtual reality categories with 5. The Pioneer categories are in the earlier stages of funding and maturity. The Established quadrant has four categories that have reached maturity with less financing. The Heavyweights quadrant also contains four categories. These categories have reached maturity with significant financing.
We’ve analyzed the virtual reality categories and their relative stages of innovation. Let’s now look at how they stack up against one another in terms of their total funding versus company counts.
The graph below shows the total amount of venture funding and company count in each category.
As the above graphic implies, the Augmented Reality category leads in funding with $3.5 billion. Its funding is almost 171% of the funding of the next category, Virtual Reality Consumption Hardware. Most notably, about 74% of Augmented Reality funding ($2.6 billion) comes from two companies: Magic Leap and Niantic.
Augmented Reality companies create products that superimpose a computer-generated environment on a user’s view of the real world. Their products include augmented reality headsets, augmented reality social games, and augmented reality surgery simulations. Some example companies in this category are Lumus, WayRay, Meta, and Blue Vision Labs.
The analysis above highlights that the Virtual Environment Content category leads the sector in total companies, and the Augmented Reality category leads in total funding. It’ll be interesting to see how the virtual reality landscape will change and develop throughout the rest of 2018.