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    Virtual reality: fundraising fell 81% in 2018

    Who I am
    Tom Chatfield
    @tomchatfield

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    Summary

    • Virtual reality: investors have lost faith in VR

    In 2015, virtual reality seemed promised a bright future without the slightest cloud. Investors were flocking to this new technology, and every idea related directly or indirectly to VR seemed to be enough to raise funds. Sadly, over the months, this enthusiasm gradually waned.

    The expected success is not there, and VR does not really succeed in seducing most consumers. As a direct result, many projects were aborted like Nokia's Ozo camera and a large number of companies thought to be on the verge of triumph have gone out of business. We can notably mention the Jaunt VR platform or even the IMAX VR arcades which are closing their doors one by one.



    Virtual reality: investors have lost faith in VR

    Unsurprisingly, a large number of startups that have raised funds without difficulty in the past are now struggling to stand. Many disappeared, and those who survived are urgently looking for a totally different economic model. In 2018, the amount of investments made in VR and AR startups in California fell 81%.

    And unfortunately, nothing suggests a trend reversal for 2019. Until virtual reality has succeeded in attracting the general public, the industry will not be able to generate real profits and investors will not see the value of taking an interest in it. However, without the necessary resources, startups will not be able to bring their ideas to life. The industry therefore risks finding itself trapped in a vicious circle from which it will be very difficult to extricate itself.


    However, let us stress that it is normal for the initial “hype” to evaporate over time. This is a sign that the industry is maturing, and that experimentation is giving way to concrete and really interesting projects. Now there is only room for really good ideas and that's quite a good thing. In addition, we can hope VR headset sales increase as prices continue to drop and that technology improves. The market will therefore gain in size, which will once again attract investors.





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