Snap unveiled the latest version of its Spectacles augmented reality glasses yesterday, and today the company announced even more news: it is also purchasing the startup that provided the technology that powers them. WaveOptics, an AR startup that produces the waveguides and projectors used in AR glasses, has been acquired by Snapchat’s parent company. Snap collaborated with WaveOptics to develop the new version of Spectacles, which layers virtual images on top of views of the real world that people wearing the glasses can see.
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The Verge broke the story first, and a Snap spokesperson confirmed the news to TechCrunch. Snap is paying more than $500 million in cash and stock for the startup. The first half of that will be paid in stock when the transaction is formally closed, with the balance payable in cash or stock in two years.
This is a significant step forward for WaveOptics, which had previously raised approximately $65 million in funding from investors such as Bosch, Octopus Ventures, and several individuals, including Stan Boland (veteran entrepreneur in the UK, most recently at FiveAI) and Ambarish Mitra (the co-founder of early AR startup Blippar). According to PitchBook, the most recent valuation was just about $105 million. WaveOptics was established in Oxford and, as far as we know, will remain headquartered in the United Kingdom.
We’ve been following the company since its early days, when it demonstrated some very interesting, early, and ahead-of-its-time technology: hologram-based waveguides and photonic crystals. The important thing to note is that WaveOptics technology greatly reduces the size and load of the hardware required to process and view images, resulting in a much wider and more compact range of form factors for AR hardware based on WaveOptics technology.
It is unclear if WaveOptics would continue to collaborate with third parties after the transaction, although it seems that one obvious benefit for Snap will be to make the startup’s technology exclusive to itself.
Snap has been on an acquisition spree recently, acquiring at least three other startups since January, including Fit Analytics for an AR-fueled foray into e-commerce, as well as Pixel8Earth and StreetCred for mapping software. Frankly, existential commitment to having a seat at the table when it comes not only to social apps that use AR, but hardware, and being at the forefront of the technology.
That has been a tenacious and not always satisfying position to be in, but the business — which has long characterized itself as a “camera company” — has held hardware as an important component in the mix.
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However, in terms of valuation, this is Snap’s largest acquisition to date. That reflects not only the premium price that fundamental artificial intelligence technology continues to command — WaveOptics has 12 filed and pending patents in addition to the team of scientists who designed it — but also Snap’s financial situation.