• by Chuck Martin , April 2, 2018

Virtual and augmented reality may not yet be a mass consumer market, but there sure is a lot of money already involved.

VR and AR startups raised more than $3.6 billion from venture capitalists and others during the last 12 months, according to a new tally.

More than $700 million was invested in the first three months of this year alone, according to Digi-Capital’s VR and AR report.

As in other early-stage tech markets, mega-rounds of investments account for most of the money. For example, Magic Leap raised nearly $1 billion in the last 12 months, Improbable raised $502 million and Pokémon Go maker Niantic raised $200 million. The five largest deals took half the money.

Consistent with other forecasts showing augmented reality gaining over the long term, Digi-Capital found that investors have been favoring AR companies over those involved in virtual reality.

By investment sector, VR and AR tech took one third of investment dollars, followed by smartglasses at a similar scale. Games, navigation, medical, social, photo, video and peripherals also were significant.

Total VR and AR deal volume (the number of deals, not the dollar value) grew each quarter last year and then declined in the first quarter of 2018. This was attributed mainly to the HTC ViveX, which had a major launch at the end of last year but none yet announced this year. Without that, the number of deals for the quarter did not decline from the previous quarter.

Interestingly, most of the VR and AR investments were spread across multiple categories, including photo, video, medical, smartglasses, education, advertising, marketing and design, among others.

Investors are looking for future augmented reality innovations. They are not alone.