AR/VR in Education: Demand for Engaging Learning Experiences Drives New Technologies Into the Classroom

The integration of augmented and virtual reality into educational environments signals a significant advance in learning technologies. AR/VR in education began over two decades ago with goals as narrow as three-dimensional anatomy models. The mid-2010s marked the turning point, as more affordable and user-friendly VR headsets and AR applications led to broader acceptance in learning settings. Those applications laid the framework for the technologies used today across every level, from K-12 through corporate training.

The market is projected to grow from $2.5 billion in 2024 to roughly $25 billion by 2030, a 46% compound rate that is among the steepest in education technology. The interesting part, from a deal perspective, is how far actual adoption still lags that forecast. AR/VR usage in U.S. workplace training sits at or below 2% across companies of every size, even though 65% of employees say simulations are the most engaging training format they encounter. The sector is being built to close that gap, and the acquirers moving fastest are the ones who already sell training into defense, healthcare, and engineering.

Industry at a Glance

One key factor driving growth is that students and educators across all learning levels are increasingly seeking educational solutions that let users interact with their learning, making it more enjoyable and engaging. VR headsets and AR devices are also becoming more accessible and affordable, which is making immersive education more widespread. And the applications keep diversifying across growing fields, STEM education among them.

Several factors still restrain the market. Initial investment is high for institutions with limited budgets. Schools without dedicated IT staff and trained teachers face real technical challenges. And content libraries remain limited relative to the breadth of what a curriculum needs. Those constraints are worth reading as the practical reason adoption trails the forecast, and they also explain why the most active acquirers are buying content and courseware rather than hardware.

Growth in AR/VR Funding

Forecasted expenditure on advanced EdTech shows AR/VR leading at $12.6 billion in 2025, up from $1.8 billion in 2018. The integration of technology into education has emphasized personalization and accessibility, with personalized learning environments, AI-driven adaptive systems, and increased mobile accessibility the key drivers. Those innovations aim to create equitable opportunities by offering customized learning experiences irrespective of location or socioeconomic status.

Demand for Engaging and Diverse Learning Experiences

In the workplace, AR/VR offer innovative methods to make education more interactive. A recent survey of training formats revealed that 65% of employees found simulations to be the most engaging. Despite that, AR/VR are still not well integrated into workplace training. A survey of training methods by delivery shows that while AR/VR are used, overall adoption remains low among companies of all sizes. That is the whitespace: significant growth potential for companies that can serve this type of learning experience across workplace training sectors.

In K-12 settings, AR/VR can bring subjects to life, enabling students to explore ancient civilizations, dive into the human body, or witness scientific phenomena firsthand, making abstract concepts tangible. In higher education, the technologies allow advanced simulations: virtual surgeries for medical students, interactive laboratory experiments for science courses, and virtual field trips to remote or hazardous locations. Increased investment in AR/VR should further improve both accessibility and the quality of these tools.

Increased Emphasis on STEM Education and Careers

Increased emphasis on STEM education drives advances in AR/VR. These tools can be used at every level: K-12 students can visualize geometry concepts with AR, university students can run science labs in VR, and Emergency Medical Services can use VR in both training and practice. The growth is tied to the push for more effective learning experiences.

Building on that momentum, in 2022 the U.S. Department of Education announced the Raise the Bar: STEM Excellence for All Students initiative, aimed at expanding access to high-quality STEM learning experiences and resources, particularly for underrepresented and underserved communities. With the support of $120 billion dedicated to K-12 education in the American Rescue Plan and other federal education funds, the department identified three goals: ensure all students from PreK to higher education excel in rigorous, relevant, and joyful STEM learning; develop and support STEM educators to join, grow, and stay in the field; and invest in STEM education strategically and sufficiently using ARP and other federal, state, and local funds.

Alongside the federal push, interest is rising in STEM-focused careers that already use AR/VR or have clear potential to. According to the Bureau of Labor Statistics, STEM professions are expected to grow 10% by 2032, compared with 2% for all other professions. Healthcare is the clearest near-term proof point: roughly half of U.S. health practices reported using VR in 2023. As interest in STEM careers grows, demand for AR/VR tools should rise with it, which makes preparing students at every level on these technologies a practical requirement rather than an enrichment exercise.

AR/VR in Education M&A Overview

In 2024 year to date, the AR/VR in education M&A market has seen 13 transactions with a median deal size of $75.7 million for strategic buyers. There are only a few published deal sizes for financial sponsors, but they are on average larger. The decrease in deal volume compared to the 2021 peak can be attributed to the earlier surge in EdTech funding and pandemic-driven growth rather than to any deterioration in the underlying use case.

The sector remains promising, strengthened by ongoing advances in AR/VR technologies and supportive macroeconomic conditions that should drive EdTech funding back up. Strategic acquirers and private equity-backed add-ons are actively seeking opportunities, reflecting sustained interest in integrating immersive technologies into educational environments. The buyer mix is worth noting: strategics have accounted for roughly three-quarters or more of activity in every year since 2019, which tells you this is a capability purchase being made by companies that already sell training, not a category being assembled from scratch by sponsors.

Notable Transactions YTD

June 2024: Street Smarts VR acquired ChimeraXR, a manufacturer of extended reality simulations serving defense and police departments, for an undisclosed amount. The acquisition strengthens Street Smarts VR’s position as a frontrunner in tactical simulations and enhances its ability to serve the Canadian Department of National Defense, the Royal Canadian Mounted Police, and police services across Canada. It introduces advanced AR and mixed reality technologies, enabling immersive training in existing environments and high-intensity XR content such as active shooter scenarios and Vehicle CQB training.

May 2024: Calian Group acquired Mabway, a provider of AR/VR simulation and training services for the defense, maritime, and railway sectors, for CAD 41 million. Mabway specializes in large-scale defense role-playing simulations and technical engineering education for naval and maritime communities, and has been a supplier to the British Army since 2012. The acquisition enhances Calian’s military training capabilities, broadens its technological offerings, and expands its presence in the U.K. and Europe.

January 2024: Mastermind Cognitive Training, a provider of comprehensive cognitive performance training, was acquired by Crane Street Capital through an LBO for an undisclosed amount. Mastermind began by enhancing athlete performance through cognitive training, then broadened its scope to education, the aging population, business, military, and first responders. Its VR and tablet-based platforms offer self-guided, gamified, and adaptive cognitive training across those applications.

Select Transactions

The table below covers AR/VR and simulation training transactions from March 2023 through July 2024. The concentration is telling: healthcare simulation and defense training account for most of the list, and the buyers are industrial and medical strategics such as GE HealthCare, Autodesk, Madison Industries, and Cornerstone OnDemand rather than education specialists. Classroom-facing AR/VR assets remain the smaller share of realized deal flow.

Public Company Data

The comparable set here looks nothing like a typical education index, and that is the point. Immersive learning gets built and bought by simulation software firms and defense primes, so the comps run from ANSYS, Autodesk, Bentley, and Dassault at the high end on EBITDA multiples to Lockheed, Northrop, L3Harris, and Textron in the low teens on far larger revenue bases. CAE, the closest pure-play in training and simulation, traded at 66.3% of its 52-week high and 10.7x EBITDA, the lowest relative valuation in the group. For a seller in immersive training, the read is that the buyer pool is industrial and defense rather than education, and it prices accordingly.