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Startups in the AR and VR sector secured record funding last year.
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  • AR and VR tech has a vast array of use cases including surgical training, gaming, and e-commerce.
  • Startups in the red hot industry attracted a record $7.2 billion from VC funds in 2021, per Dealroom.
  • We profiled 14 VR and AR startups that are primed to take off, according to top VCs.

For years augmented reality and virtual reality were viewed as a niche set of technologies that were reserved for entertainment.

Gaming companies like Roblox and Improbable dominated the AR and VR market but wider use cases have grasped investors’ attention as the technologies promise to shake up everything from medical training and construction to online shopping and conferences.

The promise of widespread adoption spurred Mark Zuckerberg into renaming the Facebook holding company to Meta to emphasize his desire for the business to lean heavily into a metaverse-based future. Elsewhere, Apple is reportedly on the cusp of unveiling its own mixed reality headset that is poised to combine both AR and VR into the same device.

VR uses sensory and haptic technology to simulate real-life experiences in a completely virtual environment, which can usually be accessed via a headset. By comparison, AR adds to a user’s existing environment and can be accessed through a phone or eyeglasses instead of a headset. Images and animations are superimposed on real objects so that the two worlds co-exist. 

Investor appetite for AR and VR startups hit an all-time high last year, raising $7.2 billion globally, per Dealroom data.

Much of what makes up the metaverse will not be wholly decoupled from our offline world,” said Andrew J Scott, founding partner of 7percent Ventures, a VC firm that invests in AR/VR startups. “We believe that companies which connect both worlds will be big.”

David Ripert, the founder and CEO of Poplar, an AR marketing startup for e-commerce retailers, believes there is more momentum in Europe following the pandemic, despite the US largely dominating funding to date.

Recently, Europe-based FOV Ventures launched a new fund for startups operating in the metaverse — the first of its kind on the continent as the industry attracts more investor attention. With VCs pouring $4.4 billion into AR and VR startups in the first quarter of this year, 2022 is looking to be a lucrative year for the sector. 

Insider asked top VCs to share the up-and-coming AR and VR startups to watch and profiled 14 of them. 

Arthur Digital creates virtual office spaces for hybrid work, complete with interactive avatars

Christopher Arthur Digital

Arthur cofounder and CEO, Christoph Fleischmann.
Christoph Fleischmann

Founded: 2016

Headquarters: California

Total raised: $2.55 million

Suggested by: Adam Draper, founder and managing director at Boost VC

Portfolio company: Yes

Backers: Boost VC, Draper Venture Network, Draper Associates, Climate Capital, Anorak Ventures

What it does: Arthur builds augmented office space in the metaverse where employees can assume avatars and interact and work together in a virtual environment. 

Its platform mimics physical offices by providing access to virtual desks, computers, and whiteboards. Cofounder and CEO Christopher Fleischmann told Forbes Arthur was looking to offer enterprises a chance to “solve their internal communication in hybrid work settings” without exorbitant office or travel costs while minimizing their carbon footprint.

Its new ‘Professional Edition’, which launched in September 2021, holds more than 70 avatars in one virtual space. The platform was beta tested by the likes of PwC and the United Nations and has ramped up its tech to expand to virtual conferences and group events.

FitXR is a virtual fitness platform that’s deployed through Oculus Quest

FitXR

FitXR cofounder and CEO, Sam Cole.
FitXR

Founded: 2016

Headquarters:  London, UK

Total raised: $15.84 million

Suggested by: Adam Draper, founder and managing director at Boost VC

Portfolio company: Yes

Backers: Boost VC, Play Ventures, Hiro Capital, Brand Foundry Ventures

What it does: The startup has created a virtual fitness platform that users can access via VR headsets Oculus Quest and Steam. 

It provides fitness training and dance sessions for groups and individuals — users can decide which option they prefer — and has a voice chat option for people who also want to vocally communicate with each other during workouts.

FitXR has a monthly membership model that gives users access to new fitness classes every day, as well as a library of fitness tutorials and at-home workouts. 

When launching the platform, cofounder and CEO Sam Cole found that the team could easily fix issues they’d initially thought would cause roadblocks, such as “sweat and hygiene”, as well as the “weightiness of the headset”. Now, it’s ramping up its immersive environments as it recently created an outdoor setting for users to work out in a “brighter space,” Cole told Tech Round. 

JigSpace allows users to make 3D models and presentations

JigSpace

JigSpace cofounders Numa Bertron (CTO) and Zac Duff (CEO).
JigSpace

Founded: 2015

Headquarters:  Melbourne, Australia

Total raised: $6.4 million

Suggested by: Adam Draper, founder and managing director at Boost VC

Portfolio company: Yes

Backers: Moonshot Space, Boost VC, Westcott, Rampersand, Investible, General Catalyst

What it does: The startup is adding another dimension to the creator economy, enabling users to create and examine 3D models via its app — and engage with them in the metaverse. 

It’s developed a no-code tool to help users interact with 3D models in augmented reality; these visualizations are stored on JigSpace’s cloud platform and can be shared across teams or accessed on the go.

For engineers, there’s a special feature to animate CAD files, often used when designing technical models — although JigSpace also caters to students, e-commerce companies, and most recently was used by F1 to allow users to interact with C42, a new car, in the metaverse.

“Our vision is to be the knowledge platform for the ‘useful’ metaverse, letting people create and share interactive, 3D knowledge about anything,” Duff told Insider. “Key areas for us this year are putting ‘Jigs everywhere’ with cross-platform partners and customers, and building out our marketing and sales operations.”

The app is free to use — and the founders want to keep it that way — but its pro platform makes money from enterprise and manufacturing company partnerships, which use JigSpace for commercial purposes. 

“We want to make sure that all of the people with information they want to share, those are the people we serve, not just the technical people at the top,” cofounder and CEO Zac Duff told TechCrunch. 

Poplar uses AR for marketing and interactive campaigns

David Ripert

David Ripert is the CEO of AR marketing startup Poplar Studio.
David Ripert

Founded: 2018

Headquarters:  London, UK

Total raised: $3.44 million

Suggested by: Ascension

Portfolio company: Yes

Backers: Super Ventures, Ascension, Haatch, Fuel Ventures

What it does: Poplar uses augmented reality to offer marketing services on social media, through interactive 3D campaigns. It’s developed a proprietary technology that uses AR to better visualize products, working with e-commerce retailers to create 3D shopping experiences for customers. 

Its partnerships include Disney, Universal, Nestle, and Pepsi, and its AR campaigns can be accessed via Google, Instagram, Facebook, and TikTok, amongst others. 

“We try to ensure that we can deploy the AR assets across the whole landscape, which is getting vaster and vaster,” Ripert told Insider. “We’re conscious that more SMEs want to launch their own e-commerce sites. As more and more people launch these, they turn to AR and VR because they don’t want to open physical stores.” 

“They are providing businesses with an easy to use, but mighty effective way of using augmented reality to transform marketing strategies,” said a representative from Ascension.

Osso is a virtual reality platform that offers surgical training

Osso

The Osso VR team.
Osso

Founded: 2016

Headquarters:  San Francisco, USA

Total raised: $108.97 million

Suggested by: Andrew J Scott, 7percent Ventures

Portfolio company: No

Backers: Tiger Global Management, Anorak Ventures, OCA Ventures, Leslie Ventures, Plug and Play Tech Centre

What it does: Osso VR provides virtual surgical training for individuals and teams. 

Currently, it partners with healthcare companies such as Johnson & Johnson, Zimmer Biomet, and Smith + Nephew, with over 120 tailored modules on various aspects of surgery such as endoscopy and orthopedics.

It’s also created a performance measurement tool that signposts what areas practitioners need to work on, comparing their progress to fellow users. Osso was particularly viable during the pandemic, as it enabled medical students to practice their medical training in a virtual environment.

With its newfound momentum from its latest $66 million Series C, it claims to be eyeing exponential growth in the coming years. 

SideQuestVR distributes VR content to users

Orla

SidequestVR cofounder and COO, Orla Harris.
Sidequest

Founded: 2019

Headquarters:  Belfast, UK

Total raised: $7.47 million

Suggested by: Petri Rajahalme, Partner at FOV Ventures

Portfolio company: No

Backers: Ascension, Ada Ventures, Boost VC, The Fund

What it does: SideQuest is a VR developer platform backed by the founder of Oculus VR, a headset operated by Meta, which can be used via headsets Quest and Quest 2.

It enables users to tap into a library of VR content such as games and demos and fosters interactions between gamers and developers. It also deploys tools to help customize VR game settings, refine the resolution of imagery, and activate a cloud backup.

SideQuest worked with Oculus to create App Lab, a platform that distributes VR apps before they’re officially released.

The startup also plans to develop tools that can assist VR developers down the line. 

SketchAR’s app enables users to practice their creative skills in augmented reality

SketchAR

SketchAR founders Alex Danilin (CTO) and Andrey Drobitko (CEO).
SketchAR

Founded: 2016

Headquarters:  Vilnius, Lithuania

Total raised: Undisclosed

Suggested by: Adam Draper, founder and managing director at Boost VC

Portfolio company: Yes

Backers: Boost VC, Yellow

What it does: SketchAR’s app hosts a range of features, from AR drawings to creating AI portraits. It’s patented its computer vision technology — which forms the foundation of most AR products — that can effectively transpose these 2D virtual drawings onto a 3D surface. 

It has also designed an algorithm to transform photos into virtual illustrations. It uses a convolutional neural network, which is an algorithm used in deep learning that takes basic images and learns to differentiate between the various components within them. SketchAR has a database of users’ images, and with this information, refines its image-to-illustration conversion process. 

It recently launched an NFT feature in a bid to diversify the remits of the creator economy. Through its community platform, every week an artist is selected as ‘Creator of the Week’, and their most recent piece of art is converted into an NFT for the OpenSea marketplace. 

Venture Beats reported that in the near future, the startup will also enable users to make NFTs to auction on-demand.

Tribe XR provides aspiring music producers with a virtual space to practice their DJ skills

TribeXR

Tribe XR cofounder, Tom Impallomeni.
TribeXR

Founded: 2017

Headquarters:  San Francisco, USA

Total raised: $6.89 million

Suggested by: Adam Draper, founder and managing director at Boost VC

Portfolio company: Yes

Backers: Boost VC, Techstars, Sound Media Ventures, Root and Shoot Ventures

What it does: Tribe XR provides aspiring DJs with a virtual platform in which they can practice their DJ skills.

Accessible via Oculus Quest and PSVR, it operates through a subscription model that gives users access to video lessons, subsidized virtual hardware such as sound mixers, and options to link DJ sessions to social streaming platform Twitch .

Since April last year, it’s also released a premium subscription.

Scenario3d lets creators upload content to the metaverse

Scenario3d

Cofounders Victor Ceitelis (VP Graphics), Hervé Nivon (CTO), and Emmanuel De Maistre (CEO)
Scenario3d

Founded: 2021

Headquarters:  San Francisco, USA

Total raised: Undisclosed

Suggested by: Andrew J Scott, 7percent Ventures

Portfolio company: No

Backers: Anorak Ventures, Diaspora Ventures

What it does: Scenario’s app captures 3D objects and transposes them into the metaverse. Users can scan any real-life object, which is then rendered into a digital version via Scenario’s software.

These digital iterations can be customized and edited, and transported into games. There’s also an option to interact with other users’ 3D objects and collaborate with them in the metaverse. The startup is looking to launch its beta platform soon. 

Innerworld offers mental health support in virtual reality

VRH

Innerworld founder and CEO, Noah Robinson
Very Real Help

Founded: 2018

Headquarters:  Nashville, USA

Total raised: $870,000

Suggested by: Andrew J Scott, 7percent Ventures

Portfolio company: No

Backers: Anorak Ventures, Jumpstart Health Investors

What it does: Innerworld gives users above the age of 18 access to mental health support via its virtual reality app Help Club. 

The startup is using technology to cover up some key pitfalls in the healthcare system. Namely, its VR alternative to therapy provides a cheaper way of treating patients who can’t afford a therapist. It also recognizes that mental health issues arise at any given time, and it connects users with help at any point during the day. By arranging consultations in a private, virtual environment, it also aims to ease the stigma associated with attending therapy in a physical space. 

Founder and CEO Noah Robinson, who is currently doing a PhD at Vanderbilt University, said that the aim of the app was to build a virtual community for support against mental health issues.

“Building a mental health space that’s ready for the metaverse isn’t easy and we’ve had to use technology to ensure a safe world for all,” he told RoadtoVR. “We screen folks and monitor interactions—although we’re not delivering therapy, we’ve adopted standard practices developed in therapy training clinics such as recording interactions to monitor for quality and prevent trolls from causing psychological harm.”

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