UK VR Firms Feast on the Metaverse Hype as Investments Rocket to £154M

Investors pumped £154 million into UK VR firms last year amid the metaverse craze according to a research report by Arden Partners.
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Quick take:

  • UK VR firms are enjoying the metaverse hype with investments rising to £154 million in 2021.
  • Research by stockbroking firm Arden Partners shows venture capitalists increased their investment in VR by 72% from 2020.
  • The firms raised £72 million during the 4th quarter, well above the previous record of £46 million set in 2018.

If you thought blockchain game developers are the only ones dancing their way to the bank because of the oversubscribed funding rounds then you are wrong. As expected, the metaverse is having a huge impact on the VR industry. 

A recent report by Arden Partners puts things in perspective, detailing the massive investment in UK VR firms between 2020 and 2021. In the analysis, investors pumped £154 million into UK virtual reality device and technology firms last year, reflecting a 72% surge from £90 million in 2020.

Arden also predicts that the video gaming industry will continue to experience growth in the coming years amid the adoption of the metaverse by the gaming community. However, some video game developer companies have faced fan backlash after announcing metaverse projects with in-game items offered as non-fungible tokens (NFTs). 

The research points to Facebook’s shift towards the metaverse as a game-changer for VR companies, having struggled to commercialise their technologies in previous attempts. 

Alex DeGroote, research director at Arden said he expects the current wave of adoption and application to continue in the coming years, adding “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.”

The investment research firm believes VR is now the fastest-growing market in the UK, posting annual growth of 31.7% in 2021. It expects the industry to maintain this growth rate over the next five years, as more gaming companies launch metaverse-based games.

Although the headlines continue to capture venture capital activity in blockchain games, very few focus on what is going on in the VR industry. 

The industry also attracted significant M&A activity last year, highlighted by the acquisition of Sumo Group by Tencent and Codemasters from EA for a combined $2.5 billion.

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