Virtual reality (VR) has transformed from a niche technology into a rapidly growing industry with huge potential. As VR goes mainstream, it presents lucrative investment opportunities for forward-looking investors. Here are 5 key strategies on how to invest in the future of VR technology and tap into its high growth potential.
Choose reputable public VR companies with strong upside
Publicly traded VR companies like Meta Platforms (previously Facebook) and Sony provide exposure to VR technology for investors. As a dominant player in VR, Meta’s Oculus VR headsets command a market share of over 75%. Sony also established an early lead in VR gaming with PlayStation VR. Besides current VR leaders, look for up-and-coming players with breakthrough technology and high growth potential. For example, VR headset maker Vuzix is pioneering next-gen AR smart glasses.
Invest in promising private VR startups before IPO
Private investments in emerging VR startups can generate outsized returns if they eventually go public or get acquired. For example, Oculus was acquired by Facebook for $2 billion in 2014, netting its early backers huge returns. Some private VR firms like Magic Leap and Dreamscape have attained unicorn status with valuations above $1 billion. Research the technology and growth prospects when investing in private VR firms.
Choose a VR-focused ETF for diversified exposure
Exchange-traded funds (ETFs) offer a low-cost way to invest in the VR theme. The Global X Virtual Reality & Augmented Reality ETF (VRAY) provides exposure to key public stocks involved in VR technology globally. Alternatively, the Viridi Cleaner Energy Crypto-Mining & Semiconductor ETF (RIGZ) also provides exposure to metaverse and VR stocks.
Invest through equity crowdfunding platforms
Equity crowdfunding platforms like Republic, SeedInvest and MicroVentures provide access to invest in private VR startups at an early stage. These platforms pool together smaller investments from a large number of retail investors. This allows small investors to gain exposure to private startups that would otherwise require large minimum investments.
Allocate to a VC or private equity VR fund
Venture capital and private equity funds focused on VR are an avenue for accredited investors to gain exposure to private companies. For example, Boost VC runs an accelerator program and invests in dozens of VR startups each year. Rothenberg Ventures and Presence Capital are two other VC funds with a VR focus.
VR is expected to become a $30 billion industry by 2026. Savvy investors can tap into this high-growth theme through stocks, startups, ETFs and funds. Focus on quality companies and emerging technologies to capitalize on the investment opportunities in VR.