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Don Stein

AR/VR Startups Raising $20M+

Published 4 months ago • 6 min read

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Which AR/VR Startups are Raising $20M+?

There are clear trends emerging by category.

1. Security & Defense:

Startup: Red 6

Funding: $70,000,000

They’ve developed an augmented-reality fighter pilot headset which is worn during training and combat. Previously, no AR system was able to create holograms in bright sunlight and at high speeds, but the EVE Headset is doing just that. The product looks like Darth Vader decided to build an AR headset for the military.

In 2023, they announced the completion of a $70 million Series B financing round led by RedBird Capital Partners. The round also included:

  • Alpha Edison
  • Boeing's AEI Fund
  • Lockheed Ventures
  • Accelerator Investments LLC through the Disney Accelerator program
  • Washington Harbour Partners
  • M-Cor Holdings
  • UK's National Security Strategic Investment Fund
  • Moonshots Capital
  • Irongate
  • State of Florida Opportunity Fund
  • Robert Downey Jr.'s Downey Labs

It makes a ton of sense that we see companies like Lockheed and Boeing participating in this financing. One point for strategics, no points for Silicon Valley VCs.

Startup: Anduril

Funding: $2,200,000,000

While Silicon Valley mostly missed out on Red 6, they definitely did not miss out on Anduril. Anduril’s most recent previous round was led by Valor Equity Partners, with participation from:

  • Founders Fund
  • Andreessen Horowitz
  • General Catalyst
  • 8VC
  • Lux Capital
  • Thrive Capital
  • DFJ Growth
  • Lightspeed Ventures
  • Angels: Elad Gil, Lachy Groom, Thomas Tull’s U.S. Innovative Technology Fund.

Anduril is using this capital to acquire defense startups, as well as pioneer their Lattice OS. Lattice is an open software platform capable of military use cases, as well as public safety.

Founders Fund, A16Z, Lux, DFJ, 8VC, and General Catalyst (my previous seed investor) are the best in Silicon Valley. It makes sense they’re funding a high-quality company like Anduril whose reported valuation was over $8 billion, with annual revenue of $650M+.

(If you're an investor and you want involvement in AR/VR --> submit your info here and I'll reach out with dealflow)


2. Healthcare:

Startup: Osso VR

Funding: $66,000,000

This company is the leading virtual reality surgical training and assessment platform. Medical professionals can practice operations without the risk of using humans, or the expense of cadavers. They announced a $66 million in Series C Fundraise. This round was led by Oakhcft with participation from GSR Ventures, Signalfire, Tiger Global Management, and Kaiser Permanente Ventures.

In my opinion, and I’ve told Wayne this many times, I feel Signalfire is one of the top funds in the entire world. To see them involved in a large AR/VR fundraise is encouraging. So yet again, another point for Silicon Valley VCs.

video preview

Startup: Augmedics

Funding: $82,500,000

Augmedics is creating a head-mounted display worn during spinal surgery. These HUD's helped the company raise a successful close of $82.5 million Series D financing. The round was led by Dallas-based CPMG and adds Evidity Health Capital as a syndicate partner, with participation from current investors H.I.G. Capital, Revival Healthcare Capital, Almeda Ventures, and others. This one is wild. Surgeons wear an AR headset during live surgery, enabling the Doctors to essentially have X-ray vision. Sounds like it’s out of sci-fi, but no, it’s really happening. They've treated 4K+ patients with the Xvision Spine System.


3. Enterprise:

Startup: Gemba

Funding: $18,000,000

Gemba announced a fresh influx of capital, $18M, in order to further pioneer executive training. They offer remote masterclasses for executives from top companies. This company boasts an impressive customer base like Pfizer, Coca Cola, Nike, Dell, Roche, and more. VR enables executives to come together in a shared virtual space, regardless of geographical location, and then learn from a recognized subject matter expert.

For example, guest speakers from companies like Amazon and AstraZeneca will appear as Avatars and educate other corporate executives. Gemba said that it plans to expedite its growth across the EMEA region and eventually expand into the North American market. Gemba’s Series A round was led by New York-based Parkway VC.

Startup: Hexa 3D

Funding: $20,000,000

This one is near and dear to my heart, as their CEO Yehiel is probably the single most gritty founder I’ve met during my time in AR/VR. He and I have hung out at my house back when I lived in San Francisco, I've watched him claw and scratch his way to the top. He’s born in Israel and was even brave enough to head to Gaza over the last few months to fight for Israel. This guy is one of the most remarkable human beings.

It did not surprise me at all to see he was able to bring in a fresh influx of capital in 2023. His company raised $20M to help generate 3D assets for the web, VR, AR, and more. For example, if Adidas wants to display their new shoes to potential customers in AR, they simply use the Hexa's AI platform to create those assets for a mind-blowing shopping experience.


4. Consumer:


Startup: Gym Class VR

Funding: $8,000,000

They haven't raised $20M, but I wanted to add them here as I predict they will. I love pick-up basketball, but after 30 years of wear and tear, a broken ankle, and hundreds of elbows during rebounding, it hurts me to play. With VR, I don’t have to stop competing. Gymclass recently announced an $8M raise from the likes of:

  • Andreessen Horowitz (a16z)
  • Y Combinator
  • the NBA
  • Golden State Warriors
  • top NBA players like Kevin Durant, Lonzo Ball, and Andre Iguodala

– AR/VR Fundraise Database –

If your XR startup has been funded, and I missed you in this newsletter, please submit your information as I will be publishing a giant database in the next few months to help hype up this industry to VCs and Angels.

Don’t see your startup, we missed you, update us here on your fundraise history: https://o7no1n5re70.typeform.com/startupfundbase


Summary: Who's raising $20M+?

Similar to the early days of computer hardware, AR/VR's adoption curve is following the path where Healthcare and Security/Defense are first being impacted, followed by enterprise, followed by consumer. It's no wonder we hardly hear about AR/VR from Silicon Valley VC's, because most of them focus on Enterprise and Consumer applications. But as this new computing paradigm is ushered into the mainstream, I expect to see a massive increase in VC funding.

If you're a founder, your target list of VC’s should be correlated to the type of company you are, not just the stage. For example, if you’re building something in entertainment, then you need to target Endeavor. If you’re building something in education, then you need to target Parkway.

If you want help on closing your fundraise round, please apply here to work with me!

-Don Stein

Www.LinkedIn.com/in/donstein

www.BldrJrny.com

If you're an investor and you want involvement in AR/VR --> submit your info here and I'll reach out with deals

Don Stein

Founder of Fengari LLC

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