AR glasses maker Nreal receives another multi-million dollar investment
Update August 26, 2022:
Nreal announces another $15 million in funding. The money comes from trade company IICombined, which has eyewear brand Gentle Monster in its portfolio, among others. Since its founding, Nreal has raised $260 million.
“This investment is exciting to connect and explore the boundaries of fashion and technology,” said Hankook Kim, co-founder of Gentle Monster and CEO of IICOMBINED. “We will leverage the strengths of both sides and make joint efforts to create more opportunities.”
Nreal currently has two tech glasses, the AR-enabled Nreal Light and the Nreal Air display glasses. The company intends to develop more devices and expand into additional markets. Currently, the Nreal glasses are available in the U.S., U.K., Japan, South Korea, Spain, Germany and China, with some affiliate sales in partnership with mobile carriers such as Telecom and Vodafone. The additional capital will be used to expand the company’s presence in the U.S., currently its strongest market.
At an event in China a few days ago, Nreal unveiled its vision for the AR future. You can watch the show in the video below.
Original article from March 30, 2022:
Metaverse arms race: Alibaba joins Nreal
A multi-million investment by Chinese e-commerce giant Alibaba is set to boost the development of AR glasses maker Nreal.
Alibaba Group is, by its own account, the largest IT group of companies in China. The best-known product in its portfolio is Alibaba.com, an Internet platform for B2B e-commerce.
In the great Metaverse arms race, Alibaba joins Nreal, contributing $60 million in its third round of funding. In total, Nreal’s investor capital amounts to $245 million. The estimated value of Nreal is likely to be between $700 million and $1 billion.
Nreal wants to grow
In Nreal’s favour are strong marketing, international distribution partnerships with telecommunications groups in the USA, Europe and Asia, and rapid product development.
Like other AR glasses makers, however, Nreal can’t change the rules of physics, which leads to typical issues with image quality, image size and form factor in its Nreal Light AR glasses. The operating software also still has room for improvement.
Perhaps because of this, Nreal most recently announced the Nreal Air display-only glasses without advanced AR features. Both glasses are targeted at the public, the main focus of use is digital displays that are supposed to replace a conventional monitor or TV – which is probably the greatest potential for AR glasses in the medium term.
Nreal plans to use the raised capital to increase investment in research and development, expand into additional markets and strengthen partnerships to create even more content for users, the company writes.
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Alibaba was one of the first Magic Leap investors
In comparison, Magic Leap had access to around 2.6 billion US dollars in investor capital in its heyday. At the time, the company was estimated to be worth between six and eight billion US dollars. That means it had significantly more money at its disposal than Nreal does today – but nowhere near enough to compete with giants like Meta or Apple.
After Magic Leap’s plan to develop AR glasses for everyone initially turned out to be technically impossible, the start-up’s estimated value dropped to around 500 million US dollars. Magic Leap restructured its staff, laid off hundreds of employees and is now selling the upcoming Magic Leap 2 AR glasses only to companies.
This is where it gets interesting: Alibaba was one of Magic Leap’s first and largest investors, along with Google, but at the time it was much more generous than it is today with Nreal. Alibaba is said to have contributed around 200 million US dollars even in Magic Leap’s early days, years before the first product.
In 2016, the two companies even showed elaborately edited videos of how they envision the AR shopping future.
At the time, former Magic Leap CEO Rony Abovitz called Alibaba “the first choice to launch into the Chinese market.” Magic Leap had up to about 1800 employees, while Nreal currently has 400.
There is another parallel between Nreal and Magic Leap: Nreal founder Chi Xu worked at Magic Leap as a software developer from July 2015 to August 2016. He then moved off to start his own company. Magic Leap sued Xu for alleged tech theft, but the suit was dismissed by a U.S. court in mid-2020.
Alibaba’s investment is rather small
Compared to the national and international competition, Alibaba’s investment in Nreal is small. Its relative reluctance could be related to its experience with Magic Leap.
For a national comparison, Chinese Internet company Tencent is reportedly working to acquire Black Shark, a maker of gaming smartphones and smartphone accessories, and retool it for XR hardware and software. Estimated takeover sum: $400 million.
TikTok operator Bytedance acquired Pico, one of the world’s largest VR headset manufacturers, last summer for about $600 million. Following this investment, Bytedance staffed Pico’s management with TikTok veterans for content growth and entered into a partnership with Qualcomm, the key chipmaker for standalone XR glasses.
However, the Chinese investments all pale in comparison to their western tech competitors: Meta has been pouring billions of dollars into XR development for years. At Apple, Google and Microsoft, the exact figures are not known, but several hundred specialists in the relevant departments and regular takeovers of start-ups should take them well over the billion mark as well.
Read more about the XR industry:
- Metaverse hype: In China, they all want to go to Yuanyuzhou
- VR is growing as it did in 2016 – but there is a catch
- Samsung: AR glasses ready, market launch in planning – report