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VR loses its luster: Investments stay subdued in Q3

Investments in virtual reality appear to be slowing their slower pace, with just four deals in the sector so far in the third quarter, according to preliminary data from Thomson Reuters.

Equity invested has ticked up slightly since the previous quarter, with the sector receiving $52 million so far, up from $38.10 million in Q2.

But that’s still down substantially from the third quarter a year ago, which saw 13 deals and $159.61 million invested in the sector.

Within Unlimited has raised the bulk of this quarter’s equity, raising $40 million in Series B funding in July from Emerson Collective, Temasek Holdings, Andreessen Horowitz, The Raine Group, 21st Century Fox, Macro Ventures and WPP Digital.

The Los Angeles company offers an online platform to create and distribute virtual reality films, and supports major VR headsets like the Oculus Rift and Samsung Gear VR.

Venture funding to virtual reality companies dropped sharply in the second quarter of this year, down to $38.10 million from $136.32 million in Q1, according to VCJ’s analysis of Thomson Reuters data.

Growth in the virtual reality sector has been slower than expected, as a couple of startups have closed shop this year. Redwood City, California-based AltspaceVR, which raised nearly $16 million in funding from investors like Comcast Ventures, GV and Foundation Capital, shut down in July although the platform appears to be remaining open.

And enterprise virtual reality software company Envelop VR, of Bellevue, Washington, raised $7.55 million from Acequia Capital, Madrona Venture Group and High Line Venture Partners before shutting its doors in January.

Download Chart: Real funding to VR targets

Photo of business people with virtual reality headsets courtesy of Petar Chernaev/iStock/Getty Images