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The Current State of Immersive Tech (July, 2017)

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Insights on the Immersive Tech Market by Ziv Reichert

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The Current State of Immersive Tech (July, 2017)

  1. 1. THE CURRENT STATE OF IMMERSIVE TECH INSIGHTS FROM THE REALITIES CENTRE, JULY 2017 @zivreichert
  2. 2. ”Over the next 10 years, the form factor’s just going to keep on getting smaller and smaller, and eventually we’re going to have what looks like normal-looking glasses that can do both virtual and augmented reality. As a matter of fact, when we get to this world, a lot of things that we think about as physical objects today, like a TV for displaying an image, will actually just be $1 apps in an app store.” MARK ZUCKERBERG CEO, FACEBOOK
  3. 3. A QUICK RECAP 🕦 Virtual Reality Augmented Reality Mixed Reality Search trends on CB Insights (2017) Where it really started 🚀 Where we’re at 👇 Where it started 🎬 It actually started in the 50s w/ Sensorama
  4. 4. THE LAST FEW MONTHS 🗓 Sources: VentureBeat (2017), Engadget (2017), Business Insider (2017), The Verge (2017), IDC (2017), Recode (2017), VRS (2017) @zivreichert Cold Facts ❄ Hot Sectors 🔥 Announcements 📣 VR/AR Jobs up 3x since 2015 >1000 AR engineers at Apple >400 VR engineers at Facebook US VR/AR Spending 2017: $4.6bn Asia VR/AR Spending 2017: $2.6bn EU VR/AR Spending 2017: $2.5bn + iMac Pro VR Ready AR Head-Mounted Displays 1 Solutions / Services 2 Video + Content 3 VR Head-Mounted Displays 4 Peripherals5 Games 6 Advertising & Marketing7 Distribution Platforms 8 $299 Windows HMD Google Daydream VR/AR @ F8 + External GPUs MacOS VR Ready (finally) (ranked by capital invested LTM)
  5. 5. THE VR LANDSCAPE: GETTING CROWDED 🥊 Sources: The Venture Reality Fund (2017) @zivreichert Full list: http://bit.ly/2rxUPdk
  6. 6. THE AR LANDSCAPE: GETTING READY FOR TAKEOFF 🛩 Sources: The Venture Reality Fund (2017) @zivreichert Full list: http://bit.ly/2uoj6Hk
  7. 7. INITIAL WAVE OF ADOPTERS: GAMERS 🎮 Sources: Road To VR (2017), Virtual Reality Pop (2017), Citi (2016), VR & Fun (2016), Newzoo (2016) @zivreichert Global Gaming Market Revenue Forecast ($bn) Cost of new videogame franchise = ~$100m; don’t expect AAA VR titles soon Current market size: ~$120bn Of which is mobile: ~$43bn ~70m VR gamers by 2020 = 30% of current installed base of 230m console gamers VR Gaming market to = $6.9bn by 2020; to grow to $11.6bn by 2025; 68% >600 VR games/apps on Steam 30% of ‘top 10’ on Steam are VR-ready eSports + VR = increased legitimacy for the sport 500m $5bn 11bn hours 10% of sports Global fans Market size Streamed viewership By 2020: will exceed the in terms of viewership Virtuix: Making eSports physical DRL raises $21m Competitive FPV drone racing 🏁 (investors: Sky, WWE, Allianz) 1st VR tournament $7.5k prizes VR eSports spectating platform raises $26m (Greycroft, DCM)
  8. 8. SECOND WAVE: EVERYONE ELSE 🌊 Sources: CB Insights (2017) @zivreichert Military & Defense 🗡 VR/AR being used to train soldiers in simulated virtual environments Example: ScopeAR; Raised $2m Events & Conferences 🎤 Organizers using VR tech to sell more virtual attendance tickets Example: Paul McCartney in 360° Advertising 💡 Brands using VR/AR-powered campaigns to immerse audiences Example: SyFy TV AR Ad Law Enforcement 👮 Police using VR/AR tools to train officers in simulated scenarios Example: VirTra; IPO’d Human Resources 💼 Companies using VR to meet and assess candidates virtually Example: Mimesys Manufacturing 🔩 Manufacturers using AR to train recent hires in using machinery Example: Inglobe Technologies Healthcare 4 Doctors using AR to visualize patients’ health information Example: FusionTech; raised $750k Media 📰 Media companies using the VR medium to tell immersive stories Example: NYT VR App Film & Entertainment 📽 Studios producing VR content to generate new revenue streams Example: Starbreeze StarVR Real Estate 🏡 Architects using AR for digital modeling of development projects Example: Augment; Raised ~$5m Automotive 🚗 Carmakers using VR to digitalize the dealership experience Example: Audi VR Dealership Space Exploration 🛰 Scientists using AR to conduct research and exploration in space Example: NASA w/ HoloLens 1 2 3 4 5 6 7 8 9 10 11 12
  9. 9. BUT WITH >1.8BN ONLINE SHOPPERS IN ‘17, THE BIG OPPORTUNITIY = RETAIL 🛍 Sources: Statista (2017), Engadget (2017), Crunchbase (2017), Citi (2016), eMarketer (2016), Research & Markets (2015) @zivreichert $23tr Global Retail Market ‘17 $35tr Global Retail Market ‘25 $5.2tr Global Online Retail Market ‘25 Of which 42% will be E-Commerce Of which 57% will be M-Commerce Of which 1% will be AR-Commerce $50bn 🌍 AR-Commerce Market ’25 (78% CAGR; ‘20-’25) Recent Deals 💵 AR modeling tool for 3D products for E-Commerce Scalable, web-based VR shopper and retail solutions 3D visualization software for home décor retailers AR platform aimed at furniture sellers and interior designers Raised $4.8m Raised $42.5m Raised $1.6m Acquired by Atheer In-Store VR catwalk experience w/ Gear VR AR Dressing Room App New product line previews via VR The~500bn cosmetics market ❤ VR/AR tech All 4 brands already using AR applications to let customers virtually try on make-up products
  10. 10. APPLE TO MAKE AR MAINSTREAM WITH iOS11 📱 Sources: Statista (2017), Fortune (2017), Apple (2017), 9to5mac (2017) >700m active iPhones worldwide (March, 2017) 86% currently running iOS10 <1 year of release; ~600m 😱 Potential for ~500m AR-ready iPhones by June 2018* * Not taking into account new iPhone/iPad sales and iPads eligible for iOS11 updates (note: there’s millions) + Beginning of AR Commerce?= IKEA = launch partner for ARKit = win “We’ve talked to Ikea, and they have 3D images of their furniture line. You’re talking about changing the whole experience of how you shop for, in this case, furniture and other objects that you can place around the home” -Apple Representative “This will be the first augmented reality app that allows you to make reliable buying decision […] When we launch new products, they will come first in the AR app” - Michael Valdsgaard, Digital Transformation, IKEA PS: IKEA sales in 2016 were ~$40bn 🖨 @zivreichert
  11. 11. DEVS ARE ALREADY GETTING CREATIVE W/ ARKIT A Sources: Twitter (2017), SimilarWeb (2017), Apple (2017) @zivreichert ~35k followers, including investors from: 4 Portals ✨ 3 SpaceX Landings 👽 2 Dancing Robots 🤖 1Online Community of hand- picked projects made with ARKit (launched in June & already >120k monthly web visitors) Meanwhile: Low adoption rates for Google’s Project Tango devices = Android lagging behind iOS w/ AR expect the competition to get heated very quickly 🔫 Measuring Tape 📏
  12. 12. BUT FOR NOW, ANDROID DOMINATES IMMERSIVE TECH W/ MOBILE VR 👑 Sources: Fortune (2017), TechCrunch (2017), Wired (2017), Games Industry (2017), TechCrunch (2017), Sensor Tower (2017), Business Insider (2016) @zivreichert sells ~300m mobile phones per year; 20% are high-end; potential for 60m Gear VR devices annually 🛒 0 2 4 6 8 10 12 Google Cardboard Samsung Gear VR Sony Playstation VR HTC Vive Oculus Google Daydream 170k units 250k units420k units750k units 4.5m units10m units ~1.42m units sold in LTM of the major non-Android VR devices 👎 ~14.67m units sold in LTM of Android VR devices 👍 Excluding the low-cost Google Cardboard headset, Samsung’s Gear VR leads; projections for 10m in circulation by ‘18 Mobile VR Apps (2016) 📱 265m Android VR app downloads 276% YoY Growth 2015 to 2016 56% Total share of VR game apps ~30 VR Android apps with >1m downloads, including: Cardboard CB Camera Expeditions Fulldrive VR
  13. 13. SNAP RAISES $3.4BN IN IPO TO TAKE ON AR 👻 Sources: TechCrunch (2017), TechRadar (2017), USPTO (2017), Crunchbase (2017) Spectacles V1 ~100,000 units sold since September 2016; $13m in revenue Snap’s latest AR patent, May ‘17 2012 AR V1 “We believe that the camera screen will be the starting point for most products on smartphones” – Snap, S-1 Filing 2015 AR V2 2017 AR V3 Spectacles V2? @zivreichert Object recognition + Spectacles + AR amounts to ~15% of Snap’s currently publicized patents
  14. 14. POKEMON GO, GOES CRAZY WITH FIRST MOBILE AR SUCCESS PokémonGoBrexit Bye Europe L Hello Pikachu ⚡ <100 Days33m 25s 2500% $1bn+ Time Spent Per Day Days To $600m YoY Growth in Net Profit Revenue To Date Runner-up: Facebook @ ~22m Runner-up: Candy Crush @ >200 days Pokémon Co: $5.6m to $143.3m Currently: $1.5m to $2.5m a day Google Search Trends: Pokémon Go vs. Brexit @zivreichertSources: TechCrunch (2017), Google (2017), BrowserMedia (2016), VentureBeat (2016)
  15. 15. AND IP LAWYERS ARE BUSY AT WORK N Sources: Upload VR (2017), TechCrunch (2017), Engadget (2017), Biz Journals (2017), CNBC (2017), FreshPatents (2017), Haptic (2017), CB Insights (2016) @zivreichert Microsoft leads with 611 VR/AR patent filings between 2009 and 2015 🗄 à VR/AR Patent Filing History Recent Patents 📜 AMZN At-home AR technology controlled with gestures; potentially for Amazon’s expanding furniture business AAPL Enhanced facial recognition using depth information; may replace the fingerprint sensor + be used for AR apps IBM Managing ephemeral locations in a virtual universe; allows programs to teleport users in VR environments SNAP Acquisition of AR IP portfolio of startup Drop; together w/ Zenly’s tech = enablement of geofenced AR features MSFT Shazam for food; a wearable nutrition feedback system using MR + computer vision to recommend meals GOOGL Working on a MR headset; will allow users to be in a VR environment yet still be able to see their own hands 1 2 3 4 5 6 Currently: ~25 VR/AR patents filed in the Q per week
  16. 16. $5.75B RAISED BY VR/AR STARTUPS SINCE 2009 IN >800 DEALS 💪 2013 – 2017 YTD (5/12/17) VR/AR Investments outstripping M&As Sources: CB Insights (2017), VentureBeat (2017), Digi-Capital (2017) LTM LTM @zivreichert
  17. 17. WITH AVERAGE DEAL SIZE = ~30x MEDIAN DEAL SIZE IN ’17 🤝 MedianAverage Huge discrepancies due to ’mega rounds’ $800m #1 $502m #2 $400m #3 $100m #4 $80m #5 Notable mentions: Blippar ($54m), Jaunt ($65m), Meta ($50m) Sources: Pitchbook (2017), CB Insights (2017) @zivreichert
  18. 18. SPEAKING OF DISCREPANCIES: MAGIC LEAP 🕴 Sources: Linkedin (2017), Magic Leap (2017), Linkedin (2017), Wired (2017), CB Insights (2016) @zivreichert $50m $542m $794m Series A Feb, 2014 Series B Oct, 2014 Series C Feb, 2016 1,158 employees 184 job openings You know you made it… 💵 💰 “Mixed reality doesn’t take you out of this world. Instead it adds elements to our real world. And it has great flexibility. You can add as little as you want—a single tiny figure on this tabletop talking to us—or you can replace the walls of this room with a skyscape so we’re sitting here watching clouds float by. If you have your Magic Leap glasses on, you can look up at the Empire State Building and watch it being built in the early 1930s, floor by floor, but sped up. Maybe while you are walking around the modern streets of Chicago you see gangsters driving past with tommy guns. It could be a form of education, entertainment, and tourism. In 10 years I expect that mixed-reality technology like Magic Leap will be used as much as, if not more than, smartphones.” – Peter Jackson Improbable & Unity too à simulation engines are 🔥
  19. 19. NORTH AMERICA LEADS IN # OF DEALS, WHILE SEED = 2/3 OF TOTAL 2009 – 2017 YTD Smallest deals = Europe L Median EU deal: $740k Still a nascent market 👶 Median seed deal: $400k Sources: CB Insights (2017) @zivreichert
  20. 20. TOP VR/AR INVESTORS ARE BASED IN NORTH AMERICA Q Meanwhile on AngelList: 897 VR/AR investors 👼 Sources: CB Insights (2017), Recode (2017), AngelList (2017) 1 2 3 4 5 6 7 8 9 *It only takes 9 deals to break into the top 9 @zivreichert
  21. 21. BUT CHINA IS NOT STANDING STILL X Sources: Upload VR (2017), Financial Times (2017), China Channel (2017), Canalys (2016) @zivreichert Market Cap: ~$350bnMarket Cap: ~$380bn Market Cap: ~$65bn 688m internet users in the country = Huge audience for VR/AR VR market will = 55bn CNY by ‘20 Up from 1.5bn CNY in ‘16 40% of VR sales come from China ~2.5m VR HMDs out of 6.3m in ‘17 Building VR shopping experiences for its 400m users w/ the new Buy+ platform; >30,000 downloads within 1hr of launch + 100s of 3D product renderings already available; Google Cardboard compatible Aiming to build the world’s largest Chinese- language VR platform by leveraging its video streaming service site IQiyi; service already compatible w/ VR; working with >300 partners to bring the VR service to 10m users by ‘18 Investing heavily in VR gaming content; well positioned to dominate the market by leveraging its own gaming IP; live streaming 360° concerts via Tencent Video; launching AR store for WeChat + VR HMD by end of ‘17
  22. 22. QUALITY VR CONTENT IS STILL MISSING (🐔 & 🥚) Steam VR Apps By Ownership Subnautica >660k Owners Keep Talking >240k Owners Universe Sandbox >150k Owners So Hollywood is coming! 1 2 3 4 G.D.T. J.F. S.S. P.J. Sources: Ploygon (2017), Upload VR (2017), VR Focus (2016) As headset adoption grows, good content will become critical Wingnut AR Studio Collab w/ The Virtual Reality Company New IP: Gnomes & Goblins VR Crimson Peak in VR @zivreichert
  23. 23. FOR NOW: AUDIENCES FlOCK TO FACEBOOK, YOUTUBE & VIMEO 📽 Sources: VR Today Magazine (2017), YouTube (2017), Facebook (2017), Vimeo (2017), Worth of Web (2017), VentureBeat (2016), Adweek (2016), TechCrunch (2016) 19m web visits/day (~700m monthly views)>1bn hours per day (~70% via mobile)1.28bn DAU (~65% via mobile) 574,000 360° videos uploaded in 2017 Updated analytics w/ heat maps coming VR Creator Lab launched to fund 360° content makers A few of the brands utilizing 360° video:YT: Visit Dubai, >10k likes FB: NY Blizzard, >170k views 18m views20m views Most viewed 360° Videos Supports 360° + VR180 + live streaming 🔴 Supports 360° but no live streaming 👎 Note: Luis Fonsi’s Despacito is at >2.8bn views as of July 2017; still a long way to go for 360° content Facebook launches Spatial Workstation Providing tools to make 360° sound more immersive Vimeo joins the game in ’17 w/ 360° Adds 8K support and introduces ’video school’ for creators Supports 360° + live streaming 🔴 @zivreichert
  24. 24. Sources: Amazon (2017), Engadet (2017), VR Zone (2017), The Verge (2017), StarVR (2017), The Drum (2016), Six Flags (2016) STUDIOS ARE INVESTING + ATTRACTIONS ARE OPENING 🎢 @zivreichert Bandai Namco opens a VR arcade ’Shinjuku’ in Japan w/ Mario Kart ] SeaWorld & Six Flags launch VR rollercoaster rides; using Gear VR Together: 34m visitors per annum +14 other VR arcade games >250k web visitors per month + + = For location-based entertainment Content distribution hardware IMAX launches first VR arcade in LA w/ StarVR; first of 6 pilots 210° w/ 5K resolution $7m VRStudio $35m LiveEvents $65m VRHardware ”Every major studio is testing the VR waters, with small scale projects run for popular franchises such Warner Bros ‘Batman vs Superman’, Fox’s ‘The X-Man’ and ‘How to Train Your Dragon” – The Drum
  25. 25. Sources: Amazon (2017), CB Insights (2017), PetaPixel (2017), PR Newswire (2016) 360° CAMS ON THE RISE AS COMPACT DIGITALS GET KILLED BY SMARTPHONES ☠ Ricoh Theta $349.99 GoPro Odyssey $15,000 Jaunt $95,000 💸 Facebook 360 $30,000 Nokia OZO $60,000 Gear 360 $349.99 Plus >100 additional 360° cameras on Amazon w/ 100s of accessories Search trends on CB Insights (2017) 360 degree cameras 🌏 360° camera market to grow @ ~35% CAGR (2016 to 2020) - New growth opportunity for manufacturers Meanwhile, compact is dying! Smartphone data doesn’t even fit 98.4% of consumer cameras sold in 2016 were built into smartphones; 0.8% were compact digital @zivreichert
  26. 26. Sources: PetaPixel (2017) Every Mac (2017), PR Newswire (2016), The Verge (2015) SPEAKING OF SMARTPHONE CAMS: THEY’VE COME A LONG WAY 🤳 @zivreichert 800 people working on the iPhone camera 1 3G 3GS 4 4S 5 5S 6 6S 2mp No Frills Geo- Tags 3mp VGA Autofocus 5pm HD Vid Front Cam 8mp 1080p Vid 5x Zoom 1.2mp front Vid stable Detection Sapphire Dual LED 1.5 Micron Slow Mo HDR Autofocus 12mp 4K Vid 5mp Front Let’s thank the 800+ camera engineers at Apple 👏 12mp f/1.8 or f/2.8 2x Optical Zoom 10x Digital Zoom 4K Video at 30 FPS 1080 Video at 30 FPS or 60 FPS Front Camera w/ f2.2 and 7mp iPhone 8 will take things a notch further with VCSEL 📸 WTF is that? A laser system that can calculate the distance light travels from the source of the laser to the target and back 💤 Why it matters? It will allow the iPhone to offer faster and more accurate depth measurements for augmented reality purposes 🙌 Tip: learn what ‘SLAM’ is, you’ll hear a lot about it in the coming months f iPhone 7 Tim Cook on AR: ”I think it is profound. I am so excited about it, I just want to yell out and scream"
  27. 27. LOOK AT THE WEB & YOU’LL SEE PEOPLE ARE INTERESTED IN VR/AR 🔎 Sources: Reddit (2017), RedditList (2017), RedditMetrics (2017), Worth of Web (2017), Alexa (2017), Quora (2017), VR Focus (2016) @zivreichert *Rank by popularity (number of subreddit members) ~1m subreddits as of June 2017 942nd Rank 867th Rank 84th Rank* >660k members >82k members >75k members ~78% YoY Growth ~24% YoY Growth ~2,600% YoY Growth >70k followers for VR/AR topics on 📈ALEXA YoY: ~250% ~2.6m website visitors every month $4.5m Series A, May ’17 vrscout.com ~170k monthly visitors roadtovr.com ~1.5m monthly visitors vrfocus.com ~580k monthly visitors 🥉 🥈 🥇
  28. 28. AND THE DESIRE TO OWN VR/AR HARDWARE IS INCREASING 📈 Sources: Road To VR (2017), Nielsen (2017) @zivreichert 51% of the Q population now knows what VR/AR is; up from 28% in 2016 Most popular device 👑 Gear VR PSVR Oculus Google Cardboard HTC Vive HoloLens Razer OSVR Sample of 2,000 people (50% Male, 50% Female) Q1: Do you intend to purchase a VR/AR device? Gear VR PSVR Oculus Google Cardboard HTC Vive 7% 7% 5% 4% 4% of women of men aged 18-24 aged 25-34 126m female adults & 120m male adults (in the Q) ~121m potential buyers Q2: Which of the following devices would you buy? 34% 26% 25% 25% 10% 10% 5%
  29. 29. CORPORATES ARE HARD AT WORK BUILDING 🔨 Hardware Software Combined market value: ~$3.4 trillion (& that’s only a handful) Sources: WSJ (2017), CB Insights (2017), Yahoo Finance (2017) @zivreichert
  30. 30. CORPORATES ARE ALSO OUT THERE BUYING 💰 Sources: CB Insights (2017), VentureBeat (2016), TechCrunch (2014, 2015) Select Recent Exits (LTM±) $350m $3bn Undisclosed Undisclosed $5.5m $59m @zivreichert
  31. 31. GOVERNMENTAL INITIATIVES ARE ON THE RISE 🏛 Sources: Engadet (2017), Augment (2017), EdSim Challenge (2017), Google (2017), Gulf News (2016), Haptic (2016) GDP: $17.95 trillion Population: 321m GDP: $1.37 trillion Population: 50m GDP: $370 billion Population: 9m GDP: $10.87 trillion Population: 1.37bn GDP: $2.42 trillion Population: 66m NYU to open the first publically funded VR/AR hub in the US w/ $6m from the Mayor’s office; expects to generate 500 jobs in the next 10 years Department of Education launching the EdSim challenge, a competition to design next-gen immersive experiences for education; total prize pool of $680k Ministry of Science will invest $363m in VR/AR initiatives over the next 5 years; seeking to encourage entrepreneurs to develop the sector New space to open in Seoul called the Korean Virtual Reality / Augmented Reality Complex (KoVAC); will provide resources and support to individuals; plans for 20 campuses 17 science-focused schools in the UAE have chosen to incorporate VR headsets into the curriculum to increase student engagement The Sharjah Book Authority (SBA) will begin publishing children’s books in virtual reality format in order to encourage children to read more Ministry of Industry establishes the Industry of Virtual Reality Alliance in partnership with >170 private companies to grow the ecosystem in China Shenzhen municipal government to establish the China Virtual Reality institute together with HTC to boost VR activity in the region and to promote trade and entrepreneurship The national curriculum in France has been revised to include augmented reality as a recommended technology to be used in middle school courses Over 1,000 teachers in France, across each of the 17 academic regions have signed up to use augmented reality tools/application to educate their students @zivreichert
  32. 32. GPU INTENSITY CONTINUES TO INCREASE EXPONENTIALLY 💻 Sources: The Motley Fool (2017), Citi (2016), Polygon (2016) @zivreichert Less than 1% of PCs in use in 2016 were powerful enough to run VR content GPUPerformanceEvolutionGPUPowerConsumption ~$10bn market cap (July ‘15) ~$100bn market cap (July ‘17)stock price up 10x in the last 2 years (if you’re long VR then you’re long NVIDIA) 70.5% share of Desktop GPU Market Requires 7x more GPU power than a normal PC game Reasoning: VR requires significantly higher frame rates & resolutions VR: 3024x1680 running at 90FPS Normal: 1920x1080 running at 30 FPS
  33. 33. NVL: ADOPTION OF HMDS WILL = SLOWER THAN SMARTPHONES 🐌 Sources: IBISWorld (2017), Statista (2017), Goldman Sachs (2016) @zivreichert The HMD market will still be pretty big. In fact, it will be worth ~$110bn by 2025 w/ >100m unit sales 😱 That’s bigger than: Units (000’s) But: 1 2 3 4 5 US Wedding Industry ($72bn) US Video Game Industry ($46bn) US Coffee Industry ($42bn) US Bar Industry ($24bn) US Theatre Industry ($17bn) ~1.5bn smartphone unit sales projected for 2017 ~170m tablet unit sales in LTM; saturating market
  34. 34. >$100B OPPORTUNITY BY 2021 🗻 Sources: IDC (2017), Inc (2017), Digi-Capital (2017), VentureBeat (2017) VR/AR Revenue Forecasts ($bn) >$100bn Potential size of VR/AR market by 2021; ~10x of today $13.9bn Amount to be spent on VR/AR in 2017; 130.5% YoY Growth 79/21 AR will overtake VR, accounting for 79% of market by 2021 5 VR/AR unicorns birthed to-date Magic Leap (~$8bn), Oculus ($3bn exit), Unity ($2.6bn), MindMaze ($1bn), Improbable (~$1bn) Notable mention: Blippar (ex-unicorn) @zivreichert
  35. 35. >$500B OPPORTUNITY IN THE NEXT 10 YEARS 🌋 Sources: Digi-Capital (2017), Citi (2016), MediaPost (2016) @zivreichert It took ~5 years for 🌏 smartphone penetration to reach 1bn; mobile AR will get there in ~3 Mobile AR Adoption (billions) 💵 💴 A $569bn Market By 2025 💶 💷 and ~$2 trillion by 2035? thinks so! Hardware ⚙ 49% CAGR Software 💿 61% CAGR The real growth driver 📈
  36. 36. BUT OPPORTUNITIES DO NOT COME WITHOUT ANY CHALLENGES w Sources: TechCrunch (2017), Qualcomm (2017), Pocket-Lint (2017) @zivreichert Battery Life 🔋 Mobility yBandwidth 🏎 1 2 3 Price 🏷 Content 📺 Pixel Density 👾 4 5 6 Issue: Long-lasting batteries are critical for wireless headsets, especially AR/MR Developments: DisplayLink XR Battery Issue: VR/AR requires low latency and high capacity networks; bandwidth = >4K streams Developments: 5G tests commencing Issue: Headsets are heavy and wired (470g for Oculus / Vive); tiring for long usage Developments: TPCAST, Oculus Connect 4 Issue: High-end PCs required for premium VR content consumption; AR HMDs pricey Developments: PSVR, Oculus for $200 in ’18 Issue: Chicken and egg problem w/ content creators; low adoption = development risk Developments: Installed base growing Issue: Current pixel density on VR HMDs (386ppi) causes severe motion sickness Developments: Gear VR 2 w/ 1500ppi
  37. 37. AND FOR EUROPE THE CHALENGE IS DEDICATED VR/AR INVESTORS 🕶 Sources: TechStars (2017), Atomico (2016) @zivreichert North America Q = ~$1.28bn LTM Europe L = only ~$380m LTM, but… 5 of the top 10 CS institutions are European (e.g. Oxbridge, UCL, ICL)1 >150 US VCs have invested here in LTM (e.g. Sequoia, KPCB)2 Emergence of new generation early stage VCs (e.g. Cherry, Felix)3 558 active investors in Europe + huge angel network4 ~4.7m developers across Europe; >450k with VR/AR skills5 >1,000 deep tech startups founded since 20146 ~$2bn invested in VR/AR LTM PS: Samsung Launching NEXT in Berlin, $150m fund to back European frontier tech startups
  38. 38. SO ISN’T IT TIME FOR SOMEONE TO FOCUS EXCLUSIVELY ON IMMERSIVE TECH IN EUROPE? - WE THINK SO
  39. 39. INTRODUCING: EUROPE’S FIRST DEDICATED VR/AR ACCELERATOR
  40. 40. THE REALITIES CENTRE INVESTING IN THE EUROPEAN VR/AR COMMUNITY
  41. 41. THE SWEET DETAILS 🍭 Our partners: £25k to £50k 2 cohorts per year Initial sectors Added Value Deal by deal Seed / Pre-A 5 startups per cohort 3 month duration Education & training Remote collaboration Corporate partners Industry advisors
  42. 42. “Like PCs in the 70s, the internet in the 80s, and smartphones in the early 2000s, we are seeing pieces of a future that isn’t quite here. But the future is coming: markets go up and down, and excitement ebbs and flows, but computing technology marches steadily forward” Chris Dixon Partner, Andreessen Horowitz
  43. 43. GET IN TOUCH ✉: ziv.reichert@gmail.com : @zivreichert

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