Ndreams, a UK-based games company, has raised £2 million ($3 million) from Mercia Technologies.
The money will be used to build immersive games for virtual reality headsets, such as Samsung's Gear VR, according to the company.
Virtual reality is a fully immersive experience that differs from augmented reality — or mixed reality — which puts virtual things on the real world.
Ndreams was founded in 2006 by Patrick O'Luanaigh, a former Codemasters executive who worked on games including "Hitman" and "Tomb Raider." Its latest funding round follows a £250,000 ($380,000) investment made in early 2014.
The company is currently developing "The Assembly," an adventure game designed to work on high-end virtual reality headsets.