Extended reality (2024)
Stepping up the startup game
Last updated: 5 Sep 2024
Market 101
Back in 2021, most backers of extended reality (XR) — a common term encompassing all of augmented (AR), virtual (VR) and mixed (MR) reality — were placing bets on metaverse solutions. Ultimately, very few of those early ideas even materialised and were hard to apply at scale. From its birthplace in gaming and entertainment, often criticised for its limited scope, XR is now a mature sector set to change the ways humans interact with the world.
Today, XR has largely manifested in the field of healthtech, alongside anything that benefits from immersive data-rich interactions. Startups in transportation, manufacturing, professional training and construction are harnessing the technology and scoring hefty reward points. Of course, gaming and entertainment — the early targets of the XR market — are still very active domains, so much so that legacy giants like the BBC are tapping into the startup market to fast-track their way into long-term XR plans.
Though the XR market hasn’t taken off as initially projected, the tech is now far more scalable, and commonplace applications may still be inevitable. Apple accepted that bet in February this year with the release of its Vision Pro product line, prompting polarising responses. While prices are still prohibitive for mass adoption on the consumer side (Apple’s headset starts at $3,500), the move finally laid a path for software bundles across new industries.
Early stage market map
Key facts
42
XR deals closed so far in 2024 (with a €2.96m average)
$100.77bn
estimated XR market size in 20261
1.2-2.4m
new jobs in Europe will be created by XR tech by 20252
Trends to watch
10x on healthtech
In 2021, Sifted selected Avatar Medical — an XR startup for high-level surgeries and medical imaging — as a digital health rising star, anticipating significant movement in the space.
Startups like Pixee Medical, Oxford Medical Simulations, apoQlar and Innerspace have all raised healthy sums this year to scale out their XR-based healthtech products, including medical training, surgery simulations, rehabilitation therapies and room sterilisation.
But it’s still early days: Sifted recorded no growth or late stage deals for the year, although early-stage dealcount is a good indicator for bigger things to come.
Training day
XR testing and training practices are becoming necessary features in risky environments, where staff are offered real-life simulations for both upskilling and basic training in order to mitigate fatal error margins.
This is the case for manufacturing — including energy plants and quality assurance for industrial production — and transportation — including data-rich driving experiences for both learners and experienced drivers, as well as defence and dual use applications.
Death to the metaverse?
Once one of VCs’ biggest bets, the metaverse has lost its mainstream appeal over the past three years. But it’s not all gone, and startups are still pushing from more efficient angles.
Though (spatial) computing costs are set to fall over the next few years, fully immersive experiences are still too costly to match their benefit, and there’s still some resistance to social isolation for non-essential applications such as gaming environments and entertainment.
Meanwhile, XR integration with existing physical spaces is increasing in both quantity and quality, whereby users can interact with native software from competing companies. That also applies to CGI-based advertising popularised in recent years.
Startups tracked by Sifted
Sifted take
It might not be the buzziest market of 2024, but the paradigm shift of extended reality is set to show its fruits as the technology matures in time. Verticalised applications across new sectors — most notably healthtech — will likely lead impact VCs to close larger growth deals for PMF-stage companies, especially as the sector’s reputation shifts from a metaverse accessory to an integral tool for a greater good.
Rising stars
Backed by the likes of LocalGlobe and Kayak Ventures, Pixaera designs digital-first learning and safety experiences for enterprises.
Round
Seed
Valuation
Undisclosed
Date
2022
Size
€5.7m
A spinout of Vrije Universiteit, Swave develops high-line chips for spatial computing applications, including holographic displays for AR glasses.
Round
Seed
Valuation
Undisclosed
Date
2023
Size
€3m
Backed by Venture Kick, Almer manufactures AR Glasses for industrial applications offered with a monthly subscription model.
Round
Seed
Valuation
Undisclosed
Date
2023
Size
€3.75m
Backed by investors including Binance Labs and Maven 11 Capital, Merit Circle is a game development platform.
Round
Seed
Valuation
Undisclosed
Date
2021
Size
€4.09m
Early stage startups to watch
3spin Learning
Virtual Reality Training and Education
€2m
€2m
-
Almer Technologies
Immersive Technology Solutions
€5.2m
€3.8m
-
AlterEyes
Immersive Technology Solutions
€700k
€300k
-
Aryel
Product development
€3.7m
€3m
-
AugmedIT
3D Modeling and Virtual Experiences
€2.7m
€1m
-
Augmento
Augmented Reality Solutions for Retail and Marketing
€2.6m
€1m
€10m
Avataris
3D Modeling and Virtual Experiences
€1.1m
€1.1m
-
Be Your Best
Virtual Reality Training and Education
€3.6m
€1.7m
-
Bodyswaps
Virtual Reality Training and Education
€960k
€1.5m
-
Condense Reality
3D Modeling and Virtual Experiences
€5.6m
€570k
-
CUREosity
Augmented reality with health
€8.1m
€3.8m
-
Distance Technologies
Immersive technology solutions
€2.5m
€2.5m
-
DRAUP
Augmented Reality Solutions for Retail and Marketing
€1.4m
€1.4m
-
DressX
Augmented Reality Solutions for Retail and Marketing
€16.6m
€13.6m
-
Enatom
Augmented reality with health
€900k
€900k
-
Enliven Social Enterprise
Virtual Reality Training and Education
€1m
€1m
-
Fectar
Augmented Reality Solutions for Retail and Marketing
€3.9m
€2.4m
€12m
Fibbl
Augmented Reality Solutions for Retail and Marketing
€7m
€4m
-
FourPlus
Virtual reality training and education
€1.4m
€1.2m
-
Graswald
3D Modeling and Virtual Experiences
€4.3m
€3m
-
Holoride
Immersive Technology Solutions
€10m
€10m
-
Imvizar
3D Modeling and Virtual Experiences
€1.5m
€700k
-
Kaiko Systems
Augmented Reality Solutions for Industrial Maintenance and Inspection
€2m
€2m
-
Karta
Augmented Reality Solutions for Retail and Marketing
€1m
€1m
-
KIT-AR
Augmented Reality Solutions for Industrial Maintenance and Inspection
€5.8m
€3.4m
-
Living Brain
Virtual Reality Training and Education
€1.6m
€1.5m
-
Ludenso
Virtual reality training and education
€1.1m
€220k
-
Lynx Mixed Reality
Product development
€1.8m
€1.8m
-
machineMD
Augmented reality with health
€4.7m
€3.4m
-
Marevo
Augmented Reality Solutions for Retail and Marketing
€1k
€1k
-
Merit Circle
3D Modeling and Virtual Experiences
€4.1m
€4.1m
-
METAV.RS
3D Modeling and Virtual Experiences
€3m
€3m
-
Metaverse Learning
Virtual Reality Training and Education
€1.8m
€1.8m
-
Metropolis World
3D Modeling and Virtual Experiences
€1.1m
€1.1m
-
MICLEDI Microdisplays
Immersive technology solutions
€11.5m
€7m
-
MIXRIFT
3D Modeling and Virtual Experiences
€1.4m
€1.4m
-
Move.ai
3D Modeling and Virtual Experiences
€13.7m
€9.1m
-
NEO AUVRA
Augmented reality with health
€4.6m
€450k
-
Neuranics Ltd
Augmented reality with health
€2.3m
€2.3m
-
Neurovirt
Augmented reality with health
€3.7m
€1.8m
-
NXRT
Virtual Reality Training and Education
€8.8m
€4.5m
-
OQmented
Immersive technology solutions
€26.6m
€18.2m
-
PeriVision
Augmented reality with health
€1m
€1m
-
Pharrowtech
Immersive technology solutions
€28.7m
€5m
-
Pixaera
Virtual reality training and education
€5.7m
€5.7m
-
Recourse
Virtual reality training and education
€4.9m
€3.9m
-
Respo.Vision
Immersive technology solutions
€3m
€1.8m
-
RETAIL VR
Immersive Technology Solutions
€1.5m
€1.5m
-
Reverto
3D Modeling and Virtual Experiences
€1.2m
€1.2m
-
Sense of Space
3D Modeling and Virtual Experiences
€560k
€90k
-
Shopnosis
Augmented Reality Solutions for Retail and Marketing
€600k
€600k
-
SideQuest
3D Modeling and Virtual Experiences
€14.8m
€10.9m
€56m
Sky Engine AI
3D Modeling and Virtual Experiences
€8.7m
€6.4m
-
Sloyd
3D Modeling and Virtual Experiences
€4m
€3m
-
Soma Reality
Augmented reality with health
€1.6m
€200k
-
Strolll
Augmented reality with health
€2.9m
€2.5m
-
SurgAR
Augmented reality with health
€1.8m
€40k
-
Swave Photonics
Immersive Technology Solutions
€10m
€3m
-
Takeaway Reality
Immersive technology solutions
-
-
-
-
The Fabricant
Augmented Reality Solutions for Retail and Marketing
€12.7m
€12.7m
-
Tribute Brand
Augmented Reality Solutions for Retail and Marketing
€4.1m
€4.1m
-
Virtex XR
3D Modeling and Virtual Experiences
€2.9m
-
-
Virtuleap
Virtual Reality Training and Education
€3.3m
€2.5m
-
Volograms
3D Modeling and Virtual Experiences
€3m
€750k
-
VRdirect
Immersive Technology Solutions
€1m
-
-
VRLab Academy
Virtual reality training and education
€10.3m
€10m
-
Wisear
Immersive Technology Solutions
€2.1m
€2m
-
Wonder Partner's
Augmented Reality Solutions for Retail and Marketing
€1.3m
€1.3m
-
Xploro Health
Augmented reality with health
€4.1m
€1.6m
-
Yaw VR
Product development
€1.7m
€580k
-
Europe’s success stories
Who early stage startups are up against
(Pre-)Seed
Series A
Series B
Series C
Series D+
IPO/Exit
ZeroLight, a UK-based startup, is transforming the car-buying experience with its plug-and-play visualization platform. Their subscription service offers high-quality 3D digital twins of vehicles. Launched in 2014, ZeroLight counts Audi, Porsche, Toyota, VW, and Nissan among its clients. The company has raised a total of $17.8m across four funding rounds, with its first round taking place in June, 2017.
(Pre-)Seed
Series A
Series B
Series C
Series D+
IPO/Exit
Launched in 2016, Finland-based Varjo develops virtual reality (VR) and extended reality (XR) headsets. Their technology serves industries like simulation, architecture, 3D modeling, and healthcare. Varjo has raised a total of $144m with Atomico among their investors. The company’s last funding round was on April 3, 2023.
(Pre-)Seed
Series A
Series B
Series C
Series D+
IPO/Exit
UK-based Improbable, founded in 2012, provides distributed simulation software for video games and corporate sectors. In late 2022, they secured $150m in funding to establish and grow M² (MSquared), with Andreessen Horowitz and SoftBank Group Corp. leading the investment. Improbable's latest valuation stands at $3.36b.
Sources
News articles
BBC Ventures makes first investment into metaverse events streaming platform | June 2024 | Sifted
Other
1 Extended reality (XR) market size worldwide from 2021 to 2026 | March 2023 | Statista
2 Extended Reality (Policies) | February 2022 | European Commission
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