Podcast Notes: When to Invest in VR
Every week, we summarize an AR/VR podcast to save you time and keep you up-to-date. This week features MetaVRse VP of Marketing Alex Colgan, who interviews Alan Smithson of the XR for Business podcast about the VR/AR investment landscape. [Note: Questions and answers were edited for brevity and clarity.]
Background: Alan is the CEO at MetaVRse, a web-based 3D/XR creation platform. In this special podcast, Alan reverses roles and allows Alex to interview him about VR/AR investments and returns, as he's been building capital for several MetaVRse projects including the MetaVRse Engine. Alan says there been "enormous" capital invested into AR/VR startups during the last few years, reaching the billions of dollars. While the pandemic has caused a sort of investment "winter," he believes a spring will emerge soon.
Alex: What are some of the biggest disruptions we've seen in the last six months due to COVID?
Alan says all the uncertainty led to investors closing up their wallets starting in March. In September, he's seen funding rounds come back and believes this pickup trend will continue through October and November. There's a lot of fresh capital sitting on the sidelines and "if it’s not deployed, it’s losing money."
There are new startups as well. More than 70 startups have created XR collaboration tools that allow you to go into VR and AR glasses and communicate with people around the world. Other opportunities exist to use 2D screens to navigate 3D worlds, like a Second Life 2.0 and live concerts. Investors have a huge opportunity with companies like this, which have market caps over $3 billion right now.
You’re also seeing a few public companies, like Unity Technologies. They raised $1 billion in a single day and saw their valuation jump from $6 billion to over $13 billion...
Alex: Are these trends going to accelerate regardless of who’s sitting in the U.S. Oval Office?
One candidate wants a complete closed down and nationalistic view of the world and that’s fine, Alan says. However, we’re in a global world now. It doesn’t behoove any one nation to try to isolate themselves anymore. We’re past that as humanity. That’s going to do a disservice to American technology companies in the long run.
Americans naturalized and natural-born Americans have a lower risk tolerance across the board, for everything from starting businesses to employment. When you have an entire generation that’s being built around lower risk, that means lower entrepreneurship rates and lower innovation. And when you don’t have immigrants coming in with highly technical skills from around the world, this can be a hindrance to companies.
Maybe this will open up opportunities for companies to have development partners around the world. It's the best time to start a company and get a company off the ground because if you can succeed in an environment like this where the world’s upside down, you are going to be able to weather the storm.
Alan says people interested in learning more about the investment landscape can search for Digi-Capital online, which tracks VR/AR investment deal flow in real-time. Q1 of 2020 was the lowest investment in AR in the last five years...