Augmented Reality Startups Struggle and Shut Down Amid High Costs
The augmented reality startup space faces a harsh reality in 2019 as several high-profile companies collapse due to high burn rates and lack of focus.
Augmented reality startups face a brutal market in 2019 as high-profile companies like Osterhout Design Group and Meta shut down or sell off their assets. These ventures raise millions of dollars to build AR headsets, but they ultimately collapse under the weight of high burn rates and overly optimistic expectations for their software ecosystems.
Osterhout Design Group exemplifies this downward trend as the early pioneer fails to maintain focus. The company raises a $58 million Series A but expands its product lines while ignoring manufacturing bugs in existing devices, leading to failed acquisition talks and a forced fire sale of its assets.
Meta experiences a similarly grim fate as geopolitical tensions disrupt its funding pipeline and a key Chinese backer walks away. These shutdowns highlight a broader industry trend where startups try to beat tech giants like Apple to the AR market, only to realize that hardware development requires more capital and discipline than they possess.