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LOS ANGELES, April 17, 2025: ARtillery Intelligence today released a new report that calculates global investments in private AR & VR companies in 2024 at $1.62 billion – a 4.5 percent year-over-year decrease. Entitled Follow the Money: XR Funding Roundup, Volume 1, the report tracks spatial computing sector funding, subsegment breakdowns, trend analysis, and strategic insights.
As for top takeaways, 2024’s XR funding is a subset of broader tech investment dynamics, and inherits many of its challenges. For example, in the down-cycle that follows the Covid software boom, funding appetites have constricted in tech sectors outside of AI, causing scarcity in venture dollars. That has, in turn, resulted in a buyer’s market for startup equity, which impacts valuations, negotiating leverage, and funding viability for those looking to raise capital.
“The hangover from the Covid software boom has constrained broader funding levels,” said ARtillery Intelligence Chief Analyst Mike Boland, “while XR is plagued by its own hangover: the metaverse fallout. This creates a tremendously challenging environment for XR startups and anyone else who isn’t focused primarily on AI – a subset attracting most of the investment dollars today.”
2024’s XR funding also represents a downward trend from its peak in 2021 ($4 billion). Furthermore, 58 percent of 2024’s XR funding total was consolidated into two large deals – Magic Leap’s $590 million round and Infinite Reality’s $350 million round – followed by a long tail of smaller deals. This puts 2025 funding levels into question.
“Having such large eggs in so few baskets in 2024 lessens our confidence in sustained funding levels in 2025,” said Boland. “Healthier and more sustainable funding inflows in any given sector are generally seen with more consistent deal sizes and fewer outlying anomalies.”
Specifically, ARtillery Intelligence projects the downward trend in XR funding to continue into 2025, totalling $1.34 billion – a 17 percent year-over-year decrease. But despite ample headwinds, ARtillery Intelligence believes that sector funding will rebound in the longer term due to several confidence signals and big-tech investment levels, especially in AI-fueled smart glasses.
“Things will get worse before they get better,” said Boland. “But AI could be a force multiplier for XR. Meanwhile, massive spending from Meta, Apple, and Google in smart glasses and XR platforms will engender robust ecosystems in the longer term that fuel down-market investment in startups that do everything from create content to build picks and shovels.”
Report Availability
Follow the Money: XR Funding Roundup, Volume 1 is available to ARtillery PRO subscribers, and more can be previewed here, including methodology, definitions, and inclusions. This report follows ARtillery Intelligence’s separate global revenue forecasts in mobile AR, headworn AR, and VR.
About ARtillery Intelligence
ARtillery Intelligence chronicles the evolution of spatial computing, otherwise known as AR and VR. Through writings and multimedia, it provides deep and analytical views into the industry’s biggest players, opportunities, and strategies. Products include the AR Insider publication and the ARtillery PRO research subscription. Research includes monthly narrative reports, market-sizing forecasts, consumer survey data, and multimedia, all housed in a robust intelligence vault. Learn more here.
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