VR 2021 Funding Totaling $176M Breaks UK Records

Chatter about the metaverse and innovation in virtual reality (VR) caught the attention of U.K. investors in 2021, with a record 154 million euros ($176 million) injected into the sector, UK Tech News reported on Wednesday (Jan. 12), citing analysis by institutional stockbroking firm Arden Partners.

Funding for U.K. VR firms escalated 72% from 2020, buoyed by a fourth-quarter wave of investments totaling 72 million euros ($82.3 million). The earlier fourth-quarter record of 46 million euros ($52.5 million) took place in 2018. In 2020, VR backing totaled 90 million euros ($102.8 million).

See also: Apple’s Move Into AR/VR Impresses BofA

The emerging curiosity about the metaverse has triggered additional interest in the already-popular video gaming sector, which is tracking to post rapid long-term growth against a backdrop of virtual and augmented worlds.

“We have seen a wave of companies in this space turning to the public equity markets and expect this to continue,” Alex DeGroote, research director at Arden, said.

“Significant technological developments in virtual reality and the metaverse are laying the foundations for the advent of new disruptors challenging the likes of Facebook, Apple and Google that are putting a lot of energy and investment into taking advantage of the potential returns from the virtual reality space,” DeGroote added.

Read more: Tech Giants Moving to Vastly Expand and Monetize the Metaverse

The pandemic lockdowns helped fuel the growth of VR in gaming, which led to record users and revenue. VR is the fast-growing division of the gaming space in the U.K., with revenue up 31.7% in 2021 and forecast to follow that trajectory across the upcoming five years, Arden said.

A flurry of mergers and acquisitions in the U.K. last year set the stage for numerous gaming companies going public.

For example, Sumo Group was acquired by Tencent, and Codemasters was purchased by EA for a total of $2.5 billion combined. Devolver Digital raised $261 million and was the biggest U.S. headquartered firm to list on the London Stock Exchange and second largest to trade on AIM.