Canadian investors are missing out on profits from Vancouver’s VR and AR industry

Article Written by Kate Wilson and Vancouver Chapter President Dan Burgar and posted by BCBusiness here


Few industries will remain untouched by virtual and augmented reality, experts predict

In the past year alone, surgeons have begun practising their work on digital bodies, mines have been planned in immersive 3D, and Walmart Inc. has chosen to train its employees in constructed realities. Touted in the same breath as blockchain, AI and machine learning, virtual reality (VR) and augmented reality (AR) are now transforming how businesses are structured.

Metro Vancouver has emerged as an epicentre of the industry. For more than 40 years, the region has nurtured talent in the animation and 3D spaces—and, in its capacity as Hollywood North, has become home to some of the largest special-effects stages in North America. Upward of 180 VR and AR companies are taking advantage of that local expertise, creating enterprise solutions for sectors from retail to real estate.

It’s a boon for investors. But according to local entrepreneurs, British Columbia’s venture capitalists are missing out.

“Metro Vancouver is one of the top markets worldwide for creating VR and AR content,” says Tony Bevilacqua, founder and CEO of Cognitive 3D, a company that provides analytics on how individuals in virtual and augmented reality interact with their surroundings. “But we’re being challenged by the lack of local investment in what we would call at-risk technologies—businesses that are very research- and development-oriented, and don’t necessarily have a healthy financial outlook in the short term. If you have the metrics for a Series A round, you can raise money here. It’s in that seed stage, where a company doesn’t necessarily have the traction or numbers to show investors, that we see the biggest gaps in local funding.”

That reticence has allowed U.S. investors to plug the breach. Many Silicon Valley–based venture capitalists have funded between 10 and 30 early-stage VR and AR companies. In Canada, there are far fewer investors, and most are only supporting one startup. As a result, profits from an industry predicted to be worth up to US$215 billion by 2021, according to market intelligence provider International Data Corp., are passing local venture capitalists by.

In the view of Tom Emrich—a partner at Super Ventures, one of the few Silicon Valley AR funds that has invested in Metro Vancouver—that shouldn’t be the case.

“It’s cheaper to run a business in Canada than in the Valley, where most of the VR and AR startups are concentrated,” Emrich says. “If you’re in America, and you’re giving an American cheque to a B.C. company, that cheque is worth more in Canadian dollars. On top of that, the burn of a business—how much it’s spending on rent, electricity, and potential talent—is definitely much less than in the Bay Area.

“Canada also has a lot of grants and government programs, like SR&ED and IRAP, that help support the growth of startups,” Emrich continues. “It can extend their runway. Funds want a company to provide them with a return, and they need to survive to do that. As an investor, hearing that a government is willing to put their arms around VR and AR businesses is another benefit.”

Commentators have proposed multiple theories to explain Canada’s reservations about investing in early-stage companies. Consumer adoption of the technology has been slower than anticipated, and it’s unclear how long it might take for funds to see returns. The country’s reputation for politeness, too, means local startups are often less bold in forecasting their success and sell themselves short compared to U.S. businesses—a factor that makes them less attractive to investors.

If B.C. venture capitalists don’t choose to put their money into seed stage funding soon, though, Emrich believes the opportunity might be gone.

“The investment possibilities for this technology come early on,” he says. “As the space matures, the larger players start to hire and acquire their own solutions. When Google, Apple, Facebook and Amazon begin to put more of a focus on developing their own solutions, the startup opportunity changes, and the venture capital opportunity changes.

“I think it’s the lowest-hanging fruit if you’re in B.C. to look in your own backyard at what’s happening,” Emrich adds. “It can be part of your competitive angle as a fund to be able to identify some stellar Hootsuites, Wattpads, or Nortels early on. The Silicon Valley folks are being inundated by Silicon Valley pitches, and they might not have the luxury or time to scope out Canadian companies. If it fits your investment thesis, can you find the hidden gems that no one knows about in the area, and help support and create the tech giants of tomorrow? If so, you can reap the returns because you got in so early.”

That sentiment is echoed by Marco DeMiroz, co-founder and general partner of the Venture Reality Fund. Also based in Silicon Valley, DeMiroz has spent the past month visiting Metro Vancouver and talking with provincial government officials about the potential for investment partnerships. Currently exploring the possibility of collaborating with local venture funds or government-sponsored entities, he deems the region to be one of the world’s top VR and AR hubs.

“Collectively, VR and AR is a tremendous market opportunity, both from a hardware and software perspective,” he says. “I think the local entrepreneurs in Metro Vancouver and I would like to see more engagement from the Canadian venture capital community, just because economically and commercially, the technology has such huge potential. It’s happening, and it’s going to evolve, and investors can’t really stay out of it.”

Highlights from VRARA Vancouver Branding for the Future (Sept Event)


VRARA Vancouver's biggest chapter event to date, Branding For The Future, took place September 26th at Hootsuite HQ. We had a full house sell out of attendees for an informative night discussing how immersive technology will disrupt the ways brands, companies, and retailers connect with consumers. 

The night started with two keynote speeches to explore how Virtual Reality and Augmented Reality have already begun to change storytelling to consumers, and how immersive technology will continue to shape and enhance brand experiences. 

First speaker was Alan Smithson, CEO of MetaVRse. On his talk "VR/AR for Business 101", he said traditional human communication mediums, such as TV, Radio, Internet, Mobile will not be going away anytime soon with the introduction of VR/AR. Simply put, augmented reality is going to be the next medium. He shared several examples of use case of AR in consumer engagement, including IKEA Place app. Alan spoke about how AR Kit was released 3 months ago, but IKEA managed to get their entire catalogue out because they started working on the product two years ago.

He urges businesses to "start now, because in a couple of years when [AR] is a commonplace and all of the big brands and your competitors have started this, you don't want to be left behind when this takes off as a communication medium."


The night was followed by second speaker, Mira Leung who is lead in ARCore at Google on "Engaging Audiences in VR/AR". She educated the audience on the technical foundation of immersive technology, and discussed engagement and visualization with AR. She says "the question will not be if but how and when VR/AR will be a significant portion of business process and customer experiences." She ended her speech on an encouraging note that what's next for VR/AR will rely on those in the audiences. Mira asked them to show the VR/AR industry what's possible, show what experiences and interactions they can create using their creativity and storytelling in combination with the technology.

Fireside chat was moderated by Nikolas Badminton, world-reknowned futurist speaker, author and researcher. The panelists were composed of industry thought leaders, including Chris Bedyk from Perspective Films, Daniel Japiassu from YDREAMS Global, and Graham Cunliffe from Finger Food, as well as the two speakers, Alan Smithson and Mira Leung. The fireside chat was a discussion about several topics. One of which was on quality of AR that is available today. Because the technology in its infancy, costs of delivering high quality VR/AR experiences is high. However the value and experience a consumer could get is often greater than having a high definition experience, especially if it is an experience that is unaccessible, such as BC Lions' dressing room.


After the speaker and fireside chat, attendees enjoyed themselves to refreshments and delicious selection of food, sponsored by Foodee, to enjoy while networking. There were also a handful of innovative companies showcasing their technology, such as Blueprint Reality, Questupon, Perspective Films, BioInteractive Technologies, cognitiveVRradical.io, and LlamaZOO

Here's the event recap video by NovusTV:


Here are the full speaker talks:


We would like to thank everyone that attended our event. Special thanks to our amazing speakers, as well as sponsors who made this happen: Hootsuite, Tradable Bits, Voyer Law Corporation, Vancouver Startup Week, LNG Studios, BC Lions, Unbounce, Futurist Nikolas Badminton, Cambridge International House, Entax, Foodee, and

Written by Laura Ryu, Marketing and Communications Manager VRARA Vancouver

VR/AR Association Releases Vancouver Ecosystem Infographic: 130+ VR/AR Companies and Growing


130+ Companies and Growing!

(Thursday Sept 21, 2017) - Vancouver is a city in the heart of the Pacific Northwest, renowned around the world for its majestic mountains, pristine waters and stunning beaches. Recently, Vancouver’s also been making a name for itself for another reason. The city has become a global hub for VR/AR/MR and is home to 130+ innovative companies. in the space. These companies are solving problems, creating immersive storytelling experiences, educating and building the next wave of computing. 

A 40-plus-year legacy in film & television production. More than 30 years of cutting-edge VFX & animation. World-class games & mobile entertainment cluster over two decades in the making, a strong tech scene and one of the top startup cities in the world.

Click here to read the full report

Transforming Digital & Marketing Agencies with VR and AR | Q&A Series with Intergalactic

This series will feature Vancouver digital and marketing agencies (non-traditional VR/AR companies) 

Our own Laura Ryu (Marketing and Communications Manager at VRARA Vancouver) sat down with Michael Farquhar, Managing Partner of Intergalactic based in Vancouver and London. They've worked with a number of clients on their interactive digital strategy including SXSW, HP and Sundance Film Festival. 


Tell us about your agency & what you've been working on.

Intergalactic is a creative technology agency that specializes in the creation of amazing interactive experiences. We’re this unique blend of creative folks and business edge, a culture that we created on purpose with the goal of creating solutions that are both inspired and effective.

We’ve been busy! We have a number of projects on the go at any time in both our Vancouver and London (UK) offices. Right now in Vancouver we’re using Apple’s ARKit to develop an AR app that provides a 1000m view of a new mountainside community. You feel like you are looking down from Olympus through the clouds at the future of this development. Computer vision reads a physical topographical model of the mountain and then we display virtual renderings of the community, lifestyle, trails, transit, and amenities. This is combined with beautiful 360 photos of the entire area and interactive points of interest; It's a great way for our client to help convey the scale and quality of their development while embracing and respecting its surroundings.

Our London office is busy building a 3D retailing visualizer to help their global retail client plan the layout of their stores and associated merchandise. When the project is complete our client will be able to switch between 2D views to full 3D VR views of their stores with all their next season merchandise laid out according to their merchandising rules. These visualisations will then push critical product information into their ordering system to trigger the fulfillment of clothing and accessories through the supply chain.

In the UK, We also have a strategic partnership with Aisle411, who’s indoor mapping and production search technology is used in over 15000 locations. Aisle411 are working closely with Google’s Tango team to leverage AR in the retail environment. Of course we still have other web and mobile projects on the go for clients such as Cisco, Microsoft and BC Liquor.


Tell us about a VR campaign that you enjoyed or was inspired by.

There are quite a few and more coming out everyday and each is genre expanding. We actually have a dedicated internal Slack channel just to keep up on what’s new. However, one we’d mention is the Beyond Mars Experience Schoolbus by Lockheed Martin (https://www.youtube.com/watch?v=X5JTb_7qv78) - I like that this is a shared experience designed to inspire.

Some other mentions: Walking on Mars (hey we’re called Intergalactic so you may see a theme) - https://youtu.be/e76uBfWxD74; Haagen-Daz’s Honeybee VR Experience which combines brand, social consciousness and amazing cinematography. From a CG excellence and technological progress standpoint using real time rendering - The Better Days https://youtu.be/JThuL6Aq1Qg and from an art perspective - Microsoft’s Raven Mask using Hololens http://www.booooooom.com/2017/07/14/transformation-mask/.

We are starting to see competition build up in advertising, especially with big players such as Saatchi & Saatchi building on-site VR labs. What are your thoughts on competition and what do you think will set apart the strong agencies from the rest?

It's funny, I just finished a round of informal reviews within the Vancouver team and asked everyone the same question. We are in many ways a young organization and everyone sort of embraces competition. We look at it as a way to learn from others in the field and see how we can take ideas in new directions and use them to deliver more value. I don’t see the big agencies cornering the market on any of these technologies. In fact VR technology itself is very accessible and a great leveler; the best will be determined by what they create, not their head count. Of course some clients will play it safe and go with bigger multinational agencies, but what they don’t always know is that those same companies approach companies like Intergalactic to ideate and create the end experience. This is something we’ve been hired to help with on more than one occasion.

How do you think the structure of agencies and its landscape will change in the next 5 years given anticipated rapid growth in VR/AR technology?

I believe we will start to see roles expand or additional roles appear within agencies as they deal with 3D interface design. Up until now we’ve focused on good 2D design, now we will need to think in the third dimension and how information can be overlayed to convey priority. I also think everything will be tried through the lens of VR, which will need to be tempered by the need to make things of value, either functionally or aesthetically. As always, agencies that get this and find ways to reach broad audiences will do well.

What is currently your biggest challenge (or as the industry) in regards to integrating VR/AR?

The biggest challenge is finding ways to create multi person experiences that are truly immersive. We all know how important social is in the technology realm so we focus on using ubiquitous devices such as smart phones or enclosed environments to help us deal with shared social VR experiences.

We know that VR/AR will be disruptive in many different industries, how will this affect your company and your clients?

The bar keeps getting raised in terms of experiences. Our clients already acknowledge this truth and have been very keen to embrace VR/AR. As a result we’re seeing a lot of our very marketing conscious sectors such as Events, Retail and Real Estate be very open to our proposals. Interestingly enough, it isn’t just for the novelty, but seems to be for the long term as there is recognition that VR/AR present more complete ways to experience products and remove barriers to a sale. For Entertainment oriented clients and other Agencies we were already there and everyone we speak to just seems to be glad that the technology is catching up with our imaginations.


Why is it important for agencies to be onboard now and join the VR/AR Association?

Easy, so you don’t get left behind. Things are evolving so quickly, it’s nice to have a way to keep up to date that doesn’t require you to do all the research first hand - no one has time for that.

What benefits do you see in being a member?

Simply, visibility, information and analysis. We want to keep our mind share for our clients, be inspired and share what we’ve learned.

We'd like to thank Michael from Intergalactic for participating and you can check them out at www.intergalactic.com