Sweden-based Dirac Research AB, a leader in sound enhancement technology, on Tuesday announced a $4.8 million investment to develop the next generation of augmented and virtual reality audio technology.

The first thing that comes to mind when most people encounter virtual reality is how the experience is going to look: the 360-degree video experience and the sense of “seeing is believing” dominates. However, the experience of being fully surrounded by sound too, moving with a user’s gaze and orientation, adds a powerful dimension to any virtual experience.

“Dirac is now the global leader in mobile audio optimization, with a growing customer portfolio that includes Huawei, OPPO, OnePlus, and Xiaomi, as well as new customers to be announced in the coming months,” said Dirac Chief Executive Officer Mathias Johansson. “At the same time, we’ve also established strategic positions in the virtual and augmented reality markets with the recent launch of our Dirac VR audio platform.”

The Dirac VR audio platform, launched at CES 2017, showed the company’s commitment to enhancing sound with VR experiences. It did so by demonstrating the ability to take into account how sound “flows” around the human body in a natural environment.

For example, when a phone rings to the left side of a user, the sound enters the left ear a fraction of a second before the right ear, and that sound also bounces off the shoulders. The brain uses all of these subtle changes effects to help the brain localize the sound source and, from the users’ point of view, how the sound changes as they turn their head to find the phone.

Oculus VR Chief Scientist Michael Abrash said that good audio could be a “force multiplier” for bringing new people to VR during Oculus Connect 2014.

“If audio is really good,” he said, “if it’s properly spatialized and it’s properly propagated so that the space of the room you’re in feels right, you won’t even know why, but the experience will be far, far more real.”

Dirac’s expansion into VR and AR comes from a solid foundation of providing optimized mobile audio technology for companies such as Huawei, OPPO and Xiaomi. All of these companies produce phones that can work with mobile VR headsets, similar to the Samsung Gear VR and Google Cardboard, or produce their own such as Xiaomi’s Mi VR headset.

SuperData Research current predictions show that the VR/AR market will reach $37.7 billion in 2020, approximately 20 times the revenue in 2016, and mobile VR will be one of 2017’s star performers in review of announcements at CES 2017.

Investors in the funding round included John Wattin, executive chairman of and investor in MySQL; Henrik Didner, co-founder of fund management company Didner & Gerge; Rami Yacoub, acclaimed music producer for Britney Spears, One Direction, Backstreet Boys, among others; Staffan Persson, chief executive of Swedia Capital; China’s AAC Technologies, the world’s leading provider of comprehensive micro-component solutions; and Jörgen Lantto, former president and chief executive of Fingerprint Cards AB.

Image: Dirac Research