--- title: Navigating the Chasm - Is it time to Invest in XR? description: Learn about the benefits of investing in late-stage VC as an alternative asset class with the Covenant VC team. image: https://blog.covenantventurecapital.com/hubfs/Covenant%20AR%20Blog%20Picture%204-1.png --- [Skip to content](https://blog.covenantventurecapital.com/equity-strategies/xr-ar-augmented-reality#main-content) [![2025 Covenant Wealth Management Logo with Tagline (Transparent)-1](https://blog.covenantventurecapital.com/hs-fs/hubfs/2025%20Covenant%20Wealth%20Management%20Logo%20with%20Tagline%20(Transparent)-1.png?width=2770&height=600&name=2025%20Covenant%20Wealth%20Management%20Logo%20with%20Tagline%20(Transparent)-1.png)](https://www.covenantventurecapital.com) - Investments Show submenu for Investments - [Equity](https://www.covenantventurecapital.com/equity) - [Credit](https://www.covenantventurecapital.com/credit) - [Wealth Management](https://www.covenantventurecapital.com/wealth-management) - Insights Show submenu for Insights - [Equity Strategies](https://blog.covenantventurecapital.com/equity-strategies) - [Credit Strategies](https://blog.covenantventurecapital.com/credit-strategies) - [Computational Economy Thesis](https://blog.covenantventurecapital.com/computational-economy-thesis) - [Press Releases](https://blog.covenantventurecapital.com/press-announcements) - [About Us](https://www.covenantventurecapital.com/about-us) Show submenu for About Us - [Who We Are](https://www.covenantventurecapital.com/about-us#who-we-are) - [Leadership](https://www.covenantventurecapital.com/about-us#leadership) - [Our Philosophy](https://www.covenantventurecapital.com/about-us#philosophy) - [Our Focus Areas](https://www.covenantventurecapital.com/about-us#focus-areas) Open main navigation Close main navigation - Investments Show submenu for Investments - [Equity](https://www.covenantventurecapital.com/equity) - [Credit](https://www.covenantventurecapital.com/credit) - [Wealth Management](https://www.covenantventurecapital.com/wealth-management) - Insights Show submenu for Insights - [Equity Strategies](https://blog.covenantventurecapital.com/equity-strategies) - [Credit Strategies](https://blog.covenantventurecapital.com/credit-strategies) - [Computational Economy Thesis](https://blog.covenantventurecapital.com/computational-economy-thesis) - [Press Releases](https://blog.covenantventurecapital.com/press-announcements) - [About Us](https://www.covenantventurecapital.com/about-us) Show submenu for About Us - [Who We Are](https://www.covenantventurecapital.com/about-us#who-we-are) - [Leadership](https://www.covenantventurecapital.com/about-us#leadership) - [Our Philosophy](https://www.covenantventurecapital.com/about-us#philosophy) - [Our Focus Areas](https://www.covenantventurecapital.com/about-us#focus-areas) - [Investor Login](https://covenantvc.addepar.com/) [Investor Login](https://covenantvc.addepar.com/) [Contact Us](https://www.covenantventurecapital.com/contact) [All posts](https://blog.covenantventurecapital.com/equity-strategies/all) June 29, 2026 # Navigating the Chasm - Is it time to Invest in XR? ![Picture of Mark Mitchell, MBA](https://blog.covenantventurecapital.com/hs-fs/hubfs/Mark%20Mitchell%20Headshot%20Cropped%20V3.jpg?width=50&name=Mark%20Mitchell%20Headshot%20Cropped%20V3.jpg) By  [Mark Mitchell, MBA](https://blog.covenantventurecapital.com/equity-strategies/author/mark-mitchell)  ·  3 minute read       Timing is everything, as the saying goes. Market conditions over the last two years have shown that the temptation to time bear and bull runs can be costly to most investors. In fact, the [Hartford Fund](https://www.hartfordfunds.com/practice-management/client-conversations/managing-volatility/timing-the-market-is-impossible.html) illustrates how timing the market is nearly impossible, and would have cost an average investor 83% in returns had they missed the 30 best days of trading in the past 30 years.    ![](https://lh4.googleusercontent.com/WJpy9ucIoaa-NYxA7tqHAD-AMSTIgV_LPh8EuOpvMPOTFAm_vPzmdFbS3V6M6pf2I4wNUm1NPmAaUUspQA9i-2I2OHz1OlxgHSB-oyt2oXAwdtfMdqYLr0F42MOa4IljfgrEcFnrHPBdmlZUFLCsse4)   How does timing work for non-correlated assets like venture capital, especially in cases of nascent technologies? Beyond deal access and liquidity, timing the boom of a new technology is one of the most significant and costly challenges of venture investing. If missing the best 30 days of trading in the past 30 years would have cost 83% in realized returns, what would be the cost of missing out on investing in, say, Netflix (NFLX)? Depending on the [source](https://www.nasdaq.com/articles/heres-how-much-a-%241000-investment-in-netflix-made-10-years-ago-would-be-worth-today-2021), around 1,300%.   Despite the recent retreat in venture valuations and [stark warnings](https://www.cnbc.com/2022/05/28/start-up-investors-issue-warnings-as-boom-times-unambiguously-over.html) of the end of outsized returns, there are many exciting spaces well within the venture investing [time horizon](https://online.hbs.edu/blog/post/investment-time-horizon) worthy of an investor’s attention. One of those areas is Extended Reality (XR), a term that captures [all technologies](https://www.interaction-design.org/literature/article/beyond-ar-vs-vr-what-is-the-difference-between-ar-vs-mr-vs-vr-vs-xr?gclid=CjwKCAjw_ISWBhBkEiwAdqxb9tMg03vsXe6EBIPTFTm3PdVpRrUnEJkT3e8u6tcf0bZiJjLId89FahoC2sEQAvD_BwE) that alters our perceptions of reality (Virtual/Augmented/Mixed).   ![](https://lh3.googleusercontent.com/SCUU4E9-SOFDwKfWY1MVDr5ZPlxay8U6st5GpLiViM0JEyVQPqxtSeFi4DeuFNbVCZpCBA0KD3-TEEsd9Zv8-OtnF1tw_8-10Bw-eNm5dymo2fmnhaVmBZWpQ9u-Scv6nHm302N9AUVrDSp1J8Ub6Ew)   If you have followed Meta (META) or Apple (AAPL), you would have undoubtedly heard of the [Metaverse](https://www.wired.com/story/what-is-the-metaverse/) or the [Apple Glass](https://www.techadvisor.com/article/738697/apple-glass-release-date-price-specs-rumours.html). These technologies will no doubt usher in an era of mass consumed XR. From healthcare, education, manufacturing, gaming, and even combat [aviation](https://red6ar.com/), the application for XR will fundamentally change how we interact in the digital and physical worlds.   The global XR market size is expected to be worth $300B by [2024](https://www.statista.com/topics/6072/extended-reality-xr/#:~:text=The%20global%20XR%20market%20size,billion%20U.S.%20dollars%20by%202024.) and $1T by [2030](https://www.psmarketresearch.com/market-analysis/extended-reality-xr-market-insights). The biggest question is not whether XR will have mass adoption, but what the timeline is for mass adoption. The [use cases](https://www.makeuseof.com/what-is-xr-examples-extended-reality/) and potential of XR, as well as the [investments](https://news.crunchbase.com/startups/metaverse-augmented-reality-virtual-reality-investment/) in the space make it a near certainty that we will see the concept of reality change in our lifetimes.     While there are many ways to gauge when a market may be prime for investment, there is no magic bullet to predict the sought after “[hockey stick](https://fourweekmba.com/hockey-stick-growth/).” Some of the more technical aspects of market research can include deep dives into device shipments, broadband and 5G penetration rates, surveys and interviews with procurement managers, and so on. In keeping with the [KISS](https://www.forbes.com/sites/mikekappel/2021/09/15/keep-it-simple-stupid-applying-the-kiss-principle-to-reports-marketing--beyond/?sh=766c54677913) principle however, an approach to timing the XR market can be to answer the 4Cs: Commercialization, Content, Cost, and Consumption.   1. **Commercialization** – is there currently [commercial application](https://www.linkedin.com/pulse/5-companies-using-xr-technology-how-you-can-too-marah-berezowsky/) and use of XR? 2. **Cost** – are [device prices](https://www.tomsguide.com/news/apple-glasses) at a price point that it is accessible to most consumers? 3. **Content** – beyond hardware, is there [enough content](https://www.xcubelabs.com/blog/extended-reality-business-apps-for-industries-in-2022/) being created by developers and creatives to keep consumers engaged; and 4. **Consumption** – have people decided to consume what XR has to offer as a normal part of their lives?   Like most new technologies, early adopters (industry and hobbyists) pay a significant premium as manufacturing costs have not been optimized for a large and supported market. As markets become larger and more entrants compete, there is an incentive to increase manufacturing efficiencies and to differentiate on pricing. This further creates opportunities for more consumers to enter the market at a lower price point, and with each additional consumer comes an increase in market size that attracts the attention of even more manufacturers and supporting industries that create an ecosystem. The [technology adoption cycle](https://www.office1.com/blog/emerging-technology-adoption-exploring-the-technology-adoption-curve-and-lifecycle) has happened with computers, the internet, smart TVs, and smartphones as recent examples. ![](https://lh3.googleusercontent.com/xz5KG-zNnBPQu8Joy6_SqY0tWRSo33-nNIFvrORZSyLyaCsfbvyOjZRh9qFR1zFtFTIEZqWkjXKg-Lb8g8lD7tW-HfKDkrq6gsnj8artx54sFwDa96Y-OSdl8R4gMZO8vS-9eHf_xJulkCKifet1hUc) However, the lifecycle is not limited to just recent technology, especially when viewed with the added [context](https://ondigitalmarketing.com/learn/odm/foundations/5-customer-segments-technology-adoption/) of the business S curve. If the XR market exhibits similar behaviors of its predecessors, the optimal point of entry would be after early adoption and before late majority: the sweet spot known as early majority. It is in this phase that the risk of being too early is significantly lowered, but there is enough room for outsized returns before the hockey stick.   ![](https://lh3.googleusercontent.com/IPrachuZV-yqYZxAMjFdReQQ1567WZBXQZH122LyIxcVqyKerBSRFoHUFd0_fvU3qvfqSRee59leasukRvtyQjTO9SZ9GzvEYLBspUpNlj50UfzBl-8nDlgR8b0EHatSX9LbKwTDEu1iRKIORhOK7Tg)![](https://lh3.googleusercontent.com/wM37xmlJ2_EYf1vc7B5FV0tmTc3cCNuUJ975t3KmX6q5ye3H0R978q1OdeSMDilablkRl7N5Tnwf6OlSJnKTS8SBCNYRDKX_rCmFNUKsFffrTzrUazlF-yeCOqxRZ0lIRd41AXp5r7KKECgerOC2wQY)             Our view at Covenant is that we have already entered the “chasm of XR” and that the sweet spot will likely be here in the next 4-7 years. With the increased support of the Metaverse and soon, Apple Glass, the market continues to gain momentum every day. There are of course unforeseen headwinds that could slow this timeline, but our view is that the time and opportunity to invest in an XR unicorn is around the corner.    If you'd like to get in touch with the Covenant team, feel free to fill out the form below to get connected with us.   Share: [facebook-f icon](http://www.facebook.com/share.php?u=https://blog.covenantventurecapital.com/equity-strategies/xr-ar-augmented-reality) [linkedin-in icon](http://www.linkedin.com/shareArticle?mini=true&url=https://blog.covenantventurecapital.com/equity-strategies/xr-ar-augmented-reality) [twitter icon](https://twitter.com/intent/tweet?url=https://blog.covenantventurecapital.com/equity-strategies/xr-ar-augmented-reality) [pinterest-p icon](http://pinterest.com/pin/create/link/?url=https://blog.covenantventurecapital.com/equity-strategies/xr-ar-augmented-reality) [envelope icon](mailto:?body=https://blog.covenantventurecapital.com/equity-strategies/xr-ar-augmented-reality) ## Related posts [![](https://blog.covenantventurecapital.com/hubfs/AI%20in%20Consumer%20Experience%20Article%20Cover%20Photo%20Finished%20Resized%202.png)](https://blog.covenantventurecapital.com/equity-strategies/ai-in-consumer-experience) [#covenantvc](https://blog.covenantventurecapital.com/equity-strategies/tag/covenantvc) ### [The Role of AI in Consumer Experience](https://blog.covenantventurecapital.com/equity-strategies/ai-in-consumer-experience) [![](https://blog.covenantventurecapital.com/hubfs/Screen%20Shot%202022-11-29%20at%2012.41.21%20PM.png)](https://blog.covenantventurecapital.com/equity-strategies/fintech-investing-in-q4-and-beyond) [#covenantvc](https://blog.covenantventurecapital.com/equity-strategies/tag/covenantvc) ### [Fintech Investing in Q4 and Beyond – What to Look For](https://blog.covenantventurecapital.com/equity-strategies/fintech-investing-in-q4-and-beyond) [![](https://blog.covenantventurecapital.com/hubfs/Screen%20Shot%202023-02-22%20at%202.13.12%20PM.png)](https://blog.covenantventurecapital.com/equity-strategies/ftx-contagion) [Computational Economy Thesis](https://blog.covenantventurecapital.com/equity-strategies/tag/computational-economy-thesis) ### [FTX Contagion](https://blog.covenantventurecapital.com/equity-strategies/ftx-contagion)   ## **Disclaimer** The reader agrees to the provisions set forth on those certain “Disclaimers” located at[https://www.finalis.com/members/disclaimers](https://www.finalis.com/members/disclaimers) and the terms thereof are incorporated by reference as though fully set forth herein, and references therein to (i) “Company” means the entity in connection with this transaction (together with its affiliates, subsidiaries, successors and assigns), (ii) “Banker” means the registered representative of Finalis Securities LLC in connection with this transaction and (iii) “Bank” means Covenant Venture Capital. 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