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The 10 Largest Virtual Reality Funding Rounds of 2016

The virtual reality (VR) industry made huge gains throughout 2016, boosted primarily by the release of the first generation VR headsets such as Facebook’s Oculus Rift, HTC Vive, and PlayStation VR. In fact, the virtual and augmented reality industries saw an 85% growth in funding from 2015 to 2016, including the largest funding rounds that the industry has ever seen. With more high-profile headset releases on the horizon, 2017 is also shaping up to be a big year for the VR industry.

The sudden surge in virtual reality funding is reflective of a technology that is poised for growth in multiple industries. Virtual and augmented reality have already found a foothold in gaming, but some companies hope to push the technology into movies, television, live events, and other media.

Let’s take a look at the largest virtual reality funding rounds of 2016 and examine what attracted investors to those companies.

Unity Technologies – $181 Million Series C

Unity Technologies’ $181 million Series C funding round is the largest for a virtual reality company in 2016. The company offers a multi-platform game development engine, and has placed emphasis on ensuring that developers have the tools required to offer high quality virtual reality content within their games.

Unity’s huge funding round was driven by several industry and company developments. The rise in popularity of the Unity engine for both standard 3D games along with VR titles, as well as the release of the first generation of VR headsets have positioned the Unity Engine as a favorite among VR developers. The Unity Engine has powered a number of very popular games in recent years, including upcoming Banjo-Kazooie spiritual successor Yooka-Laylee, Super Mario Run, Pokemon Go, Pillars of Eternity, Fallout Shelter, and Cities: Skylines.

Their rapid adoption within the industry is driven by their unique business model. Rather than charging developers tens of thousands to use their platform, the company has offered low-cost monthly subscriptions in an effort to target independent developers. This has been particularly successful in attracting the first developers of VR centric games.

MindMaze – $100 Million Venture

MindMaze enjoyed the second largest funding round among VR companies in 2016 with their $100 million in venture funding. The Swiss company offers an online platform that aims to build intuitive human machine interfaces that combine VR experiences with brain imaging and neuroscience. The company’s success can be attributed to their developments in the healthcare industry, particularly in the field of stroke rehabilitation. 

Their large funding round was driven by positive early reviews of their hospital-based,  mobile stroke rehabilitation technology, MindMotionPro. This VR platform provides patients with stimulating virtual reality environments, a stark contrast to their typically drab rehabilitation center exercises. MindMotionPro guides patients through custom-tailored exercises that are designed to improve motivation and rehabilitation in early stroke recovery. Additionally, the system provides clinics, doctors, and hospitals with in-depth neurophysiological data so that they can better assess the recovery of their patients. We covered this company before in an article titled “Augmedix and Mindmaze – Virtual Reality in Healthcare“.

Next VR – $80 Million Series B

NextVR is a company we’ve written about before in an article titled “NextVR – Virtual Reality Concerts and Sports“. Virtual reality investors clearly see live events as an unexplored frontier and potential hotbed for growth. NextVR aims to give users the ability to attend live events in virtual reality from the comfort of their own home. NextVR’s $80 million funding round, the third largest of any VR company in 2016, was driven by the company’s lucrative partnerships in the live events industry.

For now, the company clearly sees live sporting events as their best opportunity to find an audience and grow, given their partnerships with the NBA, NBC Sports, Fox Sports, US Open Tennis, ICC Soccer, and NFL. However, the company has previously commented on the potential for offering VR experiences for live events that include concerts, speeches, and comedy shows.

Osterhout Design Group – $58 Million Series A

In late December, we covered Osterhout Design Group following their huge $58 million Series A funding round that was announced at the beginning of the month. That number was large enough to make it the 4th largest funding round for VR companies in 2016 and the largest for any company in the wearables for AR/VR industry.

ODG was able to find their footing by initially setting their sights on producing smart AR/VR glasses for industrial uses, targeting markets like deskless field workers, military and security, quality assurance, and healthcare. In early January 2017, the company announced their first consumer AR/VR glasses models, the R-8 and R-9, featuring Qualcomm’s Snapdragon 835 chip.

Survios – $50 Million Series C

Survios is a virtual reality gaming company that actively develops both VR software and hardware in order to gain a deeper understanding of the user experience. Their $50 million Series C funding round was driven in large part to the warm reception that their early access virtual reality game, Raw Data received upon release.

The company’s excellent reviews helped shoot their first VR title to the top of the Steam sales charts, making it the first virtual reality only title to hit $1 million in sales in the first month of its release. The company has claimed that 20% of all owners of the HTC Vive VR headset (the only VR headset compatible with Raw Data) had purchased the game. A significant portion of their $50 million Series C funding came from MGM, which could signal increased focus on developing VR tech for film and TV.  

WEVR – $25 Million Venture

WEVR has developed a virtual reality media player and virtual reality creative community with the self-stated goal of pushing the boundaries of VR technologically and artistically. WEVR’s focus is much broader than most companies in the VR industry, as they are part creative studio, part software developer, part content showcase medium and part content creation community.

Their February, 2016 $25 million venture funding round was driven in part by their content partnerships with artists and brands like Deepak Chopra, Reggie Watts, Run the Jewels, and Jon Favreau. Recently, the company received a lot of press and critical acclaim for their recent VR experience release, Gnomes & Goblins, created in partnership with Jon Favreau (director of the Jungle Book, Iron Man) and Reality One Studios.

Baobab Studios – $25 Million Series B

Baobab labs is a VR animation company that delivers cinematic VR experiences, leading some to hail them as the “Pixar of virtual reality”. While that title may be a bit optimistic, it provides an accurate portrayal of the content that they create and their aspirations as a company. Their October 2016 $25 Million Series B funding round came on their heels of their first breakout hit, “Invasion!”, along with the announcement that the company was partnering with Roth Kirschenbaum Films, a company founded by movie industry veterans Jeffrey Kirschenbaum and Joe Roth, to bring the “Invasion!” VR experience to the big screen.

The Virtual Reality Company – $23 Million Series A

The Virtual Reality Company, founded by two-time Academy Award-winning director Robert Stromberg (Pirates of the Caribbean: At World’s End, The Hunger Games), announced their $23 million Series A funding round in June 2016. Previously, the company has attracted notable investors like Director Steven Spielberg, and Metallica singer James Hetfield. The company’s $23 million Series A funding was driven in part by their popular release, “The Martian VR Experience,” an immersive virtual reality adventure designed to accompany the popular film “The Martian.”

High Fidelity – $22 Million Venture

High Fidelity’s open-source virtual reality software allows organizations to deploy interconnected, shared virtual reality environments. High Fidelity’s goal is to offer a platform that allows educators, content creators, and entrepreneurs to offer interactive, group-based VR environments that would be ideal for training, education, and team-building exercises.

Their December 2016 $22 million venture funding round was driven in large part by their innovative technology. The High Fidelity platform provides limitless persistent meta-verses, enabled by its distributed-computing model that crowdsources processing power from users.

uSens – $20 Million Series A

uSens develops hand and positioning tracking technology for use in VR and AR systems. The company is known for its Fingo sensor, designed to supplement mobile VR experiences by adding hand tracking and marker-based position tracking that tracks the user’s location by comparing it to an external visual marker. Their $20 million Series A funding came after an impressive showing from the company during January’s CES 2016 in Las Vegas.

Conclusion

The virtual reality industry is undoubtedly poised for growth as startups and big corporations alike vie for standing in various media industries. It’s home to some of the most interesting tech innovations in recent memory – and that is reflected by the huge influx in funding that companies received throughout 2016. As the industry grows and companies find new ways to integrate VR experiences into existing markets, you can expect to see these large funding rounds grow with each passing year.

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