The Investment Landscape for VR EdTech Startups
“Virtual reality in particular was an emerging, fragmented market which put the investors in a tough spot.”
The technology can’t be just hype. There needs to be a market, and quick adoption of virtual reality products allow for the creation of one. Startups have to show that the technology is there and that their product is the best one to solve a problem in an actual market.
“For any investor, the most important concern is the return on their investment.”
Education is a long game, while venture capitalism prefers higher return in the shorter term. Virtual reality in particular is an emerging, fragmented market which put the investors in a tough spot. Plus, the educational market is fairly fixed. It is a huge market, but that doesn’t necessarily mean it will have immediate huge returns.
However, there do exist venture capital firms which specialize in emerging technologies and markets like virtual reality. These firms included Rothenberg Ventures, The VR Fund, or Qualcomm Ventures. What sets these firms apart is their attentiveness and focus toward an emerging market like virtual reality. Usually, that emerging market factor would be a turn-off for many venture capitalists, so these funds have the mindset that the industry isyoung and so were these startups. Eventually, they will establish a strong traction for themselves. These funds were more willing to take the risk.
“If funding isn’t available or it isn’t what a startup is looking for, there is another option.”
Venture capital firms like Global Silicon Valley (GSV) focus on providing additional resources for some of these virtual reality companies to be built from scratch and succeed. In accordance with Google Developers Launchpad, free consultation and mentorship for startups across emerging market verticals like education and VR/AR is provided.
“Education startups need to understand the market, as well as how their product will increase the school’s value as well as their own.”
Data and keeping tuition costs stable are critical to their success in education, so that is the major focus. Startups have to present to schools and investors that their product works well to solve a problem and would even increase their value.
“The educational market is difficult to enter, especially for an emerging technology like virtual reality, but there exist options for any stage funding.”