VR went from less than 25 to almost 100 deals in 2015, although deal activity ticked down in the first quarter of this year. Magic Leap drives funding for AR.

Just this past quarter, augmented and virtual reality (AR/VR) startups saw a 347% increase in funding, fueled mainly by Magic Leap‘s massive $793M Series C.

With the debate around AR/VR revolving around which technology will see faster diffusion and adoption, we used CB Insights data to track investment pouring into AR versus VR.

We labeled companies under these definitions:

• Augmented reality (AR): a hybrid reality that incorporates the real world with a rendered one. Magic Leap‘s headset an example in the category.
• Virtual reality (VR): a virtual world that is completely rendered. Examples here would include Jaunt, which enables cinematic VR.
• Both/Other: technologies that enable both AR and VR. An example is Eyefluence, which offers eye-tracking technology that can be applied to both virtual and augmented reality systems.

Annual trend AR vs VR

Annually, funding has flip-flopped, with far more funding going to AR in 2014 (pushed by the $542M Series B to Magic Leap in 2014) and VR winning in 2015.

VR funding grew by 391% in 2015, jumping from $95M to $465, while AR funding fell by 81% to just $125M.

Large virtual reality deals boosting that tally went to Jaunt’s $65M Series C in Q3’15, ANTVR‘s $46M in Q4’15 and NextVR‘s $30M Series A, also in that quarter. 

AR vs VR deals

In terms of deal volume, VR also pulled away dramatically in 2015. VR went from just 24 in 2014 to 94 deals in 2015, representing 292% growth in deal volume. Meanwhile, AR startups saw a 22% decline in deals year-over-year.

AR vs VR: quarterly trends

With a massive $793M Series C in Q1’16, Magic Leap‘s fundraising once again put AR funding over the top. The next-largest AR deals were a $53M Series D to Blippar and a $3M Series A to Augment. 

Perhaps overshadowed by the boom in AR driven by Magic Leap, VR still enjoyed an 8% growth in dollar funding and rose to $217M in Q1’16. Large VR deals were Mindmaze‘s $100M corporate minority round, Baofeng Mojing‘s $34M Series B, and WEVR‘s $25M Series C.

AR vs VR deal volume

VR’s deal count has been above 30 for the past 2 quarters, as VR still takes the lion’s share of deals. AR and technologies that enable both AR and VR only saw a combined 10 deals in each of the past 2 quarters.

VR saw deal activity drop from 34 to 32 deals in Q1’16, which translates to a 6% drop.

Want more data about AR/VR startups? Log in to CB Insights, or sign up below.

If you aren’t already a client, sign up for a free trial to learn more about our platform.