Serious money is finding its way into virtual and augmented reality. “The AR/VR investment market is now at an annual run rate over $1 billion even without the Magic Leap investment. This is beginning to look like a long term trend.” This is according to Digi-Capital’s new Augmented/Virtual Reality Report Q2 2016.According to this report early stage VCs and corporates invested a record $2 billion into AR/VR startups in the last twelve months. This is an unprecedented amount if one takes into account that the market is still not fully established.According to Digi Capital, investors are putting their money in companies that shows the best potential to survive the early stage market and dominate it in the long term.“While Magic Leap’s $794 million round took the headlines, that mammoth investment was only 40% of the total invested in the 12 months to June 2016. The remaining 60% went into AR/VR video, hardware, solutions and services, games, apps, advertising & marketing, tech, distribution and peripherals.”Other notable investments in VR startups during this time include Starbreeze Studios ($40 Million), Within ($12.56 million), the Virtual Reality Company ($23 million) and NextVR ($20 million). The trend seems to continue with, Unity Technologies, which created the world's largest development platform for 2D, 3D, AR, and VR games, announcing in mid-July that it has raised $181 million in a Series C round.Money is not only pouring in via investment rounds. Last month the Virtual Reality Venture Capital Alliance was established bringing together 28 leading VC firms and $10 billion deployable capital for the development and future of virtual reality. This substantial financial injection for the nascent VR industry comes from big name firms like DCM, GGV Capital, Matrix Partners, Redpoint Ventures, HTC and Sequoia.AR/VR mergers and acquisitions are also on the rise. Digi Capital reports that the last twelve months to Q2 2016 saw $849 million of AR/VR acquisitions. The biggest deals were in AR/VR tech, video and solutions/services, as well as advertising & marketing and games.Digi Capital concludes that if this level of deals continues, the annual run rate of AR/VR mergers and acquisitions could top the billion dollar mark by year’s end. It looks like AR/VR companies will continue to raise significant funds and that corporates will continue to be on the lookout for promising companies to buy.