As the pandemic continues to upend traditional ways of working, immersive technologies have emerged as a reliable alternative, and investors are increasingly recognising their potential, according to the UK Immersive Tech: VC Investment Report from HTC Vive and Immerse UK
➨ Vive X and Immerse UK surveyed 50 UK-based investors as part of the UK Immersive Tech: VC Investment Report
➨ Nearly two thirds of investors surveyed expect an increase in overall investment for augmented and virtual reality
➨ For more than a third, the pandemic had positively contributed towards this shift in sentiment
Enterprise-focused immersive technology companies are proving to be of greater interest to UK investors than those targeting the consumer market, according to a new report from HTC Vive and Immerse UK.
Vive X, the investment arm of HTC Vive, and Immerse UK, the membership organisation for immersive technologies, surveyed 50 UK-based investors as part of the UK Immersive Tech: VC Investment Report.
There was a positive lift in investor sentiment, with nearly two thirds of investors surveyed expecting an increase in overall investment for augmented and virtual reality. For more than a third, the pandemic had positively contributed towards this shift in sentiment.
Interestingly, there was a slight bias of surveyed investors towards enterprise-focused companies and the tool/infrastructure side of immersive technology.
More accessible at the lower end
Dave Haynes, HTC Vive’s director of the developer ecosystem and Vive X EMEA, writes in his introduction for the report that the immersive technology industry has gained significantly during the pandemic, “as workers and their employers have thrown out old ways of working”.
A new generation of hardware is also emerging—not least HTC Vive’s own Vive Focus 3 and Pro 2—that has made virtual reality “more accessible at the lower end, pushing us closer to mainstream adoptions”, while “the higher end is well served for both enthusiasts and enterprise customers”.
Haynes adds: “Running parallel to this, the ongoing rollout of 5G and increased sophistication of cameras and sensors in smartphones and other devices will unlock new use cases in augmented reality.”
Finally, the immersive technology ecosystem has matured. “The quantity, quality and distribution of consumer content has increased exponentially, whilst startups selling to enterprises can now do so by showing proven ROI (return on investment) rather than relying on hype to secure POCs (proofs of concept).”
A big vote of confidence in VR
Commenting on what this shift to enterprise may mean, Graham Wheeler, general manager at HTC Vive EMEA, says: “Cutting-edge technology often sees adoption and innovation take place in enterprise verticals as a way of bolstering the adoption to new audiences, before being transferred to mainstream mass user audiences (ie, a lot of people have their first experience with technology through work). The report shows a big vote of confidence in VR, with none of the surveyed investors anticipating any decline in investment levels in the coming year.”
The UK Immersive Tech: VC Investment Report profiles 31 immersive technology companies that have already raised significant amounts of external investment from a wide range of sources, to highlight the jurisdiction’s attractiveness as an investment destination and the ecosystem emerging to serve both the enterprise and consumer markets.
Several Vive X investments feature, including Bodyswaps, whose soft skills training solution and content library boast the unique selling point of allowing learners to ‘swap’ roles and undertake experiences from multiple viewpoints. The company has raised £549,000 in financing so far.
The featured company with the biggest disclosed financing behind it is Ultraleap, the tracking technology venture that formed after Ultrahaptics acquired Leap Motion in 2019.
Ultraleap, whose hand tracking technology was optimised for Snapdragon XR2, has raised £63 million so far and is an interesting case study for Immerse UK, because the company is headquartered in Bristol rather than the more fashionable London.
In the report, Ultraleap’s founders reveal that they opted for Bristol as the location of their headquarters due to access to talent, with a strong local silicon industry, as well as a growing creative industry and relative proximity to London.
More private funding for founders
Commenting on where the UK needs to focus to develop and nurture its immersive technology industry, Asha Easton, Immerse UK lead at KTN, says: “The UK needs to focus its development to nurture the immersive tech industry by providing more private funding for founders, at the earliest stages to encourage more startups/innovation. One way to do this could be through angel networks or dedicated programs. Additional areas for development include increased investor education regarding the opportunities in this sector, encouraging more diverse founders to start companies.”
“The simultaneous continuation of immersive sector-specific public funding like the Audience of the Future programme, with fewer barriers to entry, would add a lot of value. The combination of all of these resources for early stage companies helps to grow the ecosystem.”
Images: HTC Vive