Acquisitions and Funding Stays Strong in AR/VR as Companies Recognize Growing Market Opportunity

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By Eric Abbruzzese | 2Q 2022 | IN-6504

The rate of acquisition and secured funding rounds remains high in the immersive market space. Startups are showcasing innovation and potential but cannot scale without help, while large companies recognize the importance of expansion and diversification into immersive as the market scales.

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Spreading the Love


It has been another busy month in the Augmented Reality (AR) and Virtual Reality (VR) markets, with a handful of impactful acquisitions and successful funding rounds.


  • Niantic acquired 8th Wall, a development platform focused on WebAR and content democratization. Niantic has been prolific with acquisitions over the past year, and 8th Wall will be a part of the company’s Lightship development efforts.
  • Google Acquired Raxium, a company specialized in LEDs for augmented and virtual reality. It joins a growing hardware effort from Google, with their own Glass product still in enterprise, an acquisition of glasses player North, and development support with ARCore.
  • Adobe acquired BRIO XR, a cloud-based AR/VR visualization creation tool.
  • Snap acquired NextMind, a brain computer interface startup. Snap has built out an AR ecosystem for social media content and plans expansion into dedicated AR hardware.


  • VR gaming developer nDreams raised US$35 million, and confirmed they are working on titles for the upcoming Sony PSVR2.
  • Rokid, a smart glasses Original Equipment Manufacturer (OEM), raised US$160 million in Series C. Rokid has found success in enterprise smart glasses so far, with expansion plans on the back of the investment.
  • nReal, a mixed reality smart glasses player, received US$60 million in a Series C. Despite being based in China, the company has focused on a selection of other countries, but now plans to expand “into” China.
  • Osso VR, a VR surgery and procedure guidance platform, raised US$66 million in a Series C.
  • MediView XR, an immersive telehealth platform, raised US$9.9 million in a Series A.
  • While not an acquisition or actual funding round, Qualcomm launched a US$100 million fund for immersive developers.

No One Path to Success


This collection of announcements is interesting for two main reasons:

Firstly, activity is broad and varied in terms of portfolio, company types involved, and likely timelines for results/product. Some are long term plays, like Snap and NextMind—brain machine interfaces are incredibly nascent and need significant time to mature into an input solution at scale but investing early to build capability close to home can have advantages as the market scales. Niantic and 8th Wall, on the other hand, can immediately get tools into developers’ hands and spur content creation and broader AR access through browsers. The same is true of Adobe and BRIO XR, with both partnerships targeting democratization of both content creation and access. Both AR and VR are well represented—both markets are expected to see an uptick over the next twelve months, partly driven by metaverse hype but mostly thanks to market alignment of price, performance, and perceived value for users.

Secondly, none of the deals are exorbitantly valued or over-reaching in terms of scope. There have been deals in the AR and VR space in the past that were unfathomable in terms of total value, which ultimately did not deliver to that level of expectation. The same can be said of some acquisitions that never really found traction under the new entity. The news highlighted here is reasonable and sometimes expected, but expectations are attainable as a result.

Does this Pace Continue?


Whether this level of Mergers and Acquisitions (M&A) and investment activity continues isn’t assured, but it is likely. AR and VR are at an interesting crossroads, as peak hype has come and gone, with immersive settling into a more stable and mature segment, but at the same time other segments are accelerating interest in immersive. Even ignoring metaverse, enabling technologies like edge compute and 5G, AI for machine vision/automation/spatial analytics, and technology component improvements (e.g., microLED for displays, more efficient and immersive-targeted chipsets) are driving capability farther. Market expansion is happening both in early adopting verticals (industrial, gaming, education), as well as more conservative spaces (healthcare, fitness). That confluence of price, performance, and perceived value mentioned earlier is a key tenet of technology expansion, which has not yet been seen at scale in the AR or VR space.

This pace of play creates an interesting competitive dynamic as well. For smaller companies, go-to-market plans may have to shift from outright technical competition to creating a compelling acquisition target. These go hand in hand—marketing with lack of a compelling product can only get you so far—but as the more established companies continue to acquire and invest internally for the immersive space, the once competition-rich market starts looking starker. There is still plenty of room for outright innovation at a small scale, even in more “mature” segments like VR hardware, as iterations on existing capability, as well as novel approaches like light field displays, will keep the hardware segment interesting. The software and services side shifts far quicker and will hold significant competition especially as tech incumbents compete in house, through partnerships and through acquisition. Immersive is an expensive market to play in, so the scale and resources available to the tech giants becomes increasingly necessary to compete.



Companies Mentioned