AR/ VR industry lacks homegrown investors
TORON TO • Canada’s augmented and virtual reality industries are in “desperate” need of homegrown investors to keep profits from seeping across the border and overseas, say some of the country’s top innovators in the sector.
“Why should investors in China, Silicon Valley and Dubai make the money from our tech companies and our government money?” Alan Smithson, the CEO of consultancy company MetaVRse, said in a discussion about AR and VR’s future at the Cantech Investment Conference in Toronto last week.
“We are missing massive opportunities and need to figure out the funding model to keep the funding in Canada.”
Smithson and panellists from companies including Google said there shouldn’t be a lack of homegrown investment. They said Canadian AR and VR talent isn’t scarce, the country’s tax incentives and government grants are generous, and businesses can nab considerable savings as developer pay is a quarter of what those in San Francisco earn.
They believe i nvestors should also be less hesitant because prominent Canadian companies are experimenting with such technology, reaffirming its usefulness and viability.
The panellists noted Cirque du Soleil uses AR and VR to design sets for shows to try out the placement of elements before installing them. AR has even appeared at the Art Gallery of Ontario, where its current ReBlink exhibition lets visitors step inside a painting using a custom phone and tablet app that unlocks an immersive experience.
Even with such successful adopters as an example, the panellists hypothesized Canadian AR and VR investors are partially shy to open their wallets. They said that when the technologies first started emerging, forecasts predicted massive profits and growth, but didn’t account for how long it would take to see those returns.
The panellists agreed that Canadian companies were not being as aggressive in marketing themselves to investors as their U.S. rivals.
“Canadian pitches do not think big at all. The revenue projections are a third to a half of what Americans think they can do — and that is not a good thing, because at the end of the day, investors want to see big money,” said Tom Emrich, a partner at Super Ventures, an earlystage fund dedicated to augmented reality.
What Canadian companies do have is a knack for content. Google’s Alex Katzen said she’s read that 84 per cent of Canadian AR and VR companies are focused on building content as opposed to platforms. She said this is positive because she suspects content will be an area that will “really move the needle” as the technologies continue to evolve.
The technologies are seeing a surge in Vancouver, which is quickly becoming a Canadian hub for VR companies — but still not generating as many investors as the U.S., said Smithson.