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Tech Talk: New VR, AR M&A Trends Indicate Rapid Investments


The virtual reality (VR) and augmented reality (AR) industries have been rather active in terms of mergers and acquisitions (M&As) in the last year, with exactly 21 major deals in these segments being recorded over the last 12 months. While various VR and AR solutions have been explored on a number of occasions in the past, technological advancements have finally made such creations viable for commercial implementation, making many venture capitalists and tech giants extremely optimistic about their prospects, as evidenced by a massive wave of M&As that the industry is witnessing since August 2016.

With the majority of the recently acquired VR and AR startups transitioning under the umbrellas of larger companies that are either private or don’t break down their individual acquisitions in their quarterly and annual reports, the financial details of many M&As in the industry concluded over the last 12 months are undisclosed and will likely remain that way for the time being. The largest confirmed sum in this segment was that paid by Snapchat maker Snap for Cimagine Media in December 2016, wherein the social media giant confirmed that it parted with $30 million to acquire the Tel Aviv, Israel-based AR startup last year. Intel and Fireswirl Technologies paid over $7 million each to take over VOKE and Amzon (HK) Limited, respectively, though the latter purchase has yet to be approved by competent regulators. The final transaction on the list of recent M&As in AR and VR that isn’t a complete mystery is that which saw Samsung Electronics pay $5.5 million for New York City-based VRB, though that particular deal was also conducted in an extremely subtle manner, with its first details not surfacing before mid-June despite the fact that the South Korean original equipment manufacturer (OEM) concluded the acquisition two months earlier.

Other well-known firms that purchased VR or AR startups in the last 12 months include Chinese tech giant Baidu, Florida-based mixed reality company Magic Leap, and U.S. gaming behemoth Valve. None of the buyers have been particularly forthcoming with the details of their recent acquisitions, with that scenario being reflective of the current state of the industry; both AR and VR are still in their infancy and the race for the most efficient and universally accepted commercial implementation of these solutions is still on. This state of affairs is likely what prompted various industry actors to be secretive about their related M&A activities as they might still be worried that they’ll show their hands too early and needlessly give their competitors enough time to respond. Regardless of the fact that major VR and AR M&As are still being conducted in a maximally discreet manner, their sheer volume still indicates that investments in these segments are surging and may continue to do so in the short to medium term.

While there’s little doubt that recent trends in the VR and AR industries are a strong indicator of venture capital’s confidence in these sectors being on a steady rise, they are still unlikely to significantly affect the consumer market in the near future. As things stand right now, both AR and VR still need time to gain true mainstream popularity, but tech companies and other investors seemingly have a positive outlook on the industry as a whole and believe that it’s just a matter of time before this segment starts enjoying massive adoption rates.



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