WaveOptics, maker of waveguide-based optics for AR, nabs $16M


WaveOptics, a UK startup that builds waveguide-based optics — technology based on
hologram physics and photonic crystals — for augmented reality
hardware, has raised $16 million (£12 million) to help build
the next phase of its business.

The Series B round of funding — which comes from previous
investors Octopus Ventures, Touchstone Innovations
plc and Robert Bosch Venture Capital GmbH; along with new
investor Gobi Ventures (the prolific VC firm out of China that also
manages one of Alibaba’s entrepreneur funds)
— is one of biggest of the year for AR startups out of Europe,
and comes on the heels of significant business wins for
WaveOptics.

Sumanta Talukdar, who co-founded the company with David Grey,
confirmed to me in an interview that WaveOptics is working with
some significant, large tech companies on AR hardware, beyond
products with its strategic investor, Bosch. (For the record,
he laughed but also declined to comment when I straight-out
asked if those companies included Apple and Google.) The first
products, he added, are likely to hit the market next year and
are aimed at both the consumer and enterprise markets.

He also declined to give me a valuation for his company.
Notably, when I saw WaveOptics pitch at a London event last
year (at Pitch@Palace), the company touted its significantly
more modest budget when compared to some others in the AR
field: and in fact prior to this Series B it had just raised
only around $400,000.

Magic Leap, as one comparison, has raised $1.4 billion; and enterprise-focused
Daqri has disclosed $15 million in funding, but
we and others have heard through the grapevine
that it’s secretly been raising significantly more and is now
valued at $1 billion. Both are building hardware, so that is
one reason for the higher numbers overall.

Indeed, we’ve seen a number of AR firms come to market building
vertically-integrated solutions covering both the software and
hardware stacks, as well as software and apps that create
experiences based on the basics of AR as currently works in
existing hardware (such as Blippar, which also happens also be
an investor in WaveOptics). What WaveOptics
focuses on is something in between these two.

The company is building optics technology that can be used
across different hardware, which it believes could change the
rulebooks for where AR can be used, and how it can be used.

Up to now, while there have been some very powerful AR optics,
they fall on their form factor: the resulting devices are just
too big. Those that are small compromise on performance, by not
giving users the abilty for immersive experiences.

And up to now, hardware that has achieved both of these
qualities in one device — ideal size and performance — has
turned out to be too expensive to make. “Being able to address
all those things — performance, form factor and scalability —
is what sets us apart,” Talukdar said.

“AR optics with great user experience and affordable
cost in the mass production is the key for market adoption of
AR products,” said Hongquan
Jiang, Partner at Robert Bosch Venture
Capital GmbH, in a statement.
“WaveOptics‘ wave guides could become a game changer
in this respect for the AR industry. We are very excited about
the company and expect much synergy
between WaveOptics and Bosch in a variety of AR
applications.”

A demo video on the company’s website — whose URL is
“enhancedworld.com” — gives you an idea of what WaveOptics is
working on. The video takes the user through a quick journey
with a cyclist who is able to check his bike’s diagnostics, get
on the bike, navigate the roads, monitor his vitals, and track
a virtual “race route” along the way — the idea here is that
the system is capable of very fast, real-time processing of
images and delivering back data to a user in an active,
fast-moving environment.

“The video is not just a symbolic vision of
what we would like to do,” said Talukdar. “It represents a real
use case.”

Going forward, it looks like there is still need and room for
more development, however.

“WaveOptics has made significant technical and commercial
progress since the investment round we led in October 2015,
with very positive feedback from industry on its initial beta
products. This new funding will allow the company to complete
its product development and position itself as a leader and key
technology enabler of highly compelling AR experiences,” said
Robert Bahns, director at Touchstone Innovations, in a
statement

Many companies like WaveOptics, developing elements of AR and
VR services rather than the end-to-end product, have become hot
acquisition targets for tech giants that are working on their
own AR strategies, Apple’s acquisition of Metaio in 2015 being one
example (Apple has yet to release any AR or VR hardware of its
own). WaveOptics for now looks to be focusing on building its
product and client base rather than exiting. Talukdar declined
to comment on any acquisition offers.

“As this round shows, we are continuing to
build a lot of significant value over the coming months for our
investors,” he said.

It is not the only company in the space: two close competitors
include Lumus in Israel, which has also raised
significant funding; and Dispelix out of
Finland.

WaveOptics believes that it has a stronger approach than these
others. “WaveOptics is reinventing the AR market,
by developing a series of new AR display tech that enables
a wider field of view and brighter full colour images — a
unique combination in today’s market,” said Martin
Harriman, Chairman, WaveOptics, in a statement. “This
funding round further accelerates development of our
industry-leading technologies and enables us to launch
programmes in new markets and territories. We are excited about
the team of investors we have on board who share our vision.”

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