London is well-placed to take advantage of the fast-growing immersive technology space, according to a new report.
Research from London & Partners and Dealroom.Co reveal that the UK capital ranks as the top European hub and fifth globally for venture capital investment into immersive tech companies.
Fuelled by the growth of AR, VR and metaverse technologies, the report also shows that immersive tech funding is bucking the trend for global startup investment in 2022.
In the first three quarters of this year, total global funding levels have reached $8.8 billion and are on course to surpass any other year previously.
Europe is one of the fastest-growing regions for immersive tech innovation, with those startups raising a record $1.4bn already in 2022. European immersive tech companies are on track to raise 50% more in funding than last year’s record total, growing faster than global immersive tech investment.
The combined value of European immersive tech startups has grown 18 times in the last 10 years and the European ecosystem is now worth $71.1 billion.
London is at the centre of Europe’s burgeoning immersive tech ecosystem, with the research showing that the UK capital has attracted over $1.5bn in venture capital funding over the past five years – more than any other European city.
London joins the likes of the Bay Area ($10.2bn), Beijing ($6.1bn) and New York ($2.4bn) in the top 5 cities globally for funding since 2017 and continues to rank in the top five for funding so far in 2022.
The report demonstrates London’s particular strength lies in the Metaverse, which attracts 56% of immersive tech funding in the past five years. Other technologies attracting significant investments include augmented, virtual and mixed reality companies.
Some examples of exciting London based companies that have received significant funding recently include a $150m funding round for metaverse tech unicorn Improbable, a $20m Series B funding round for virtual reality firm Fundamental VR and a $20.5m Series A funding round for augmented reality startup XYZ.
Over the past five years, the UK has consistently ranked first in Europe for immersive tech funding, accounting for a third of all European immersive tech startup investment. Total funding for UK immersive companies has already reached $506m so far this year, surpassing the total money raised in 2022.
“London is brilliant for convergence sectors – where talent and tech from different industries combine. Immersive is a great example – it combines London’s strengths in gaming, storytelling and creative industries,” said Laura Citron, CEO at London & Partners.
“That’s why we’ve seen a number of immersive tech companies make London their home. This research shows that London is not only the leading European city for immersive technology but is also competitive on the global stage. We’re excited to welcome more immersive technology companies to London.”
Chris Scattergood, CRO & founder of Fundamental VR, added: “One of the main reasons for selecting London was the fact that the talent is here, unlike anywhere else in Europe.
“It’s got the right combination of skills and talent, but also people want to be here, it’s a place where people come from across Europe to work.”