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Sector overview: Immersive Technology

Immersive technology

With 2023 underway we’re going to be highlighting sectors that offer plenty of opportunities for investors each month. First up is Immersive Technology, which is part of the creative industries, but converges with many other leading sectors and encompasses interactive tech such as augmented reality (AR) and virtual reality (VR).

What is immersive technology? 

Immersive technology is a sector that develops and creates new ways for people to display and interact with content and experiences. The user feels like they are part of an environment that has been simulated such as through a virtual reality headset or by blending the real and virtual worlds.

With advances in technology such as the Oculus Meta Quest headset changing the world of gaming, and interactive experiences popping up around the world such as Otherworld in London, immersive technology is transforming the way that we interact and the way we consume, and participate, in entertainment.

But it’s not just gaming and the creative sector that is utilising immersive technology. It is accelerating growth in many other leading sectors thanks to its ability to enable companies to cheaply build virtual prototypes as well as transforming how we interact with and consume content. In Education, students are able to immerse themselves in historical moments in time, bringing to life experiences that could only have been read about previously.

Healthcare is fast-adopting immersive technology too. From medical students and physicians learning new and sometimes advanced procedures or techniques to patients using AR and VR for physical rehabilitation or therapy, it is offering the next generation of healthcare. AR and VR is now used in body scans, remote consultations, surgical training, and rehabilitation to name a few. We are experiencing a new wave of exciting advancements in digital health though AR and VR, but innovators have only just scratched the surface. This is an incredibly exciting time for early-stage investors here in the UK.

Immersive technology
Credit: Pexels

What does the market look like in the UK?

The AR and VR sector is the fastest-growing market in Europe with a 78.3% growth rate for spending expected in the UK between 2019 to 2024. By 2030 it is predicted that growth will reach £62.5 billion.

Research from London & Partners and Dealroom.co found that London ranks as the top European hub, and fifth in the world, for venture capital investment into immersive tech companies. According to their recent report, London has attracted more than $1.5bn in venture capital funding over the past five years with 56% of that funding allocated to the Metaverse.

What are the opportunities for investors?

With immersive technology on an upward trajectory, there are opportunities for investors right across the UK. While London may be considered the place that’s attracted the most funding, there is a lot of activity happening across the country too. The South West of England is an area that has been highlighted as one of the fastest-growing for immersive technology, with Plymouth in particular a place where growth has been impressive.

The North East has been identified as an area that is best-placed to lead the global immersive technology market thanks to its thriving manufacturing sector and its emerging technology support infrastructure. 

Coventry and Warwickshire have a strong track record in games and AR/VR content. With the skills and capabilities prevalent in the region, it has become known as a world-leading games development and publishing ecosystem.

You can see the latest investment opportunities on the Department for International Trade’s website.

Immersive technology
Credit: Pexels

What are the opportunities for founders? 

Innovate UK’s Audience of the Future Challenge invested £39.3 million in the development of new immersive technologies and with spending in the sector predicted to increase over the coming years, there are going to be lots of opportunities for founders.

Currently there are a number of competitions and programmes running that offer funding to founders in the immersive technology space. The best place to keep up-to-date with them is via the Immerse UK website, which you can visit at https://www.immerseuk.org/funding/.

Useful links

Audience of the Future – Creative Landscape 2020

Audience of the Future – The Immersive Audience Journey (PDF)

Department for International Trade – Augmented reality and virtual reality

London’s Creative Frontier: A Global Immersive Tech Leader (PDF)

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By UKBAA 31 Jan 2023