Since its inception in 2017, Nreal has completed five financing rounds, accumulating more than $200 million.
Author | Amelie
Edit | Zhao Jian
On March 30, Augmented Reality (AR) technology company Nreal announced the completion of a $60 million Series C+ round of funding, led by Alibaba. According to Nreal's official introduction, this round of financing will be used to increase R&D expenditure, broaden diversified application scenarios, and accelerate market expansion.
Starting in the second half of 2021, the financing boom in the AR field has resumed, and according to Crunchbase News, in the fourth quarter of 2021, the total financing of ar/VR startups as a whole reached 12 billion, more than in the previous two years combined.
This year, this heat is still continuing. According to the incomplete statistics of "JiaZi Lightyear", Lingxi Micro Light, AR products and content platform Yixin Advanced Technology, AR smart glasses company Rokid, and XR solution provider Interpretation Sensing have all received financing ranging from tens of millions to hundreds of millions of yuan.
Unlike most of the current AR manufacturers focusing on the B-side to seek landing, Nreal has been determined to create terminal products that users like since its inception in 2017, and insists on doing technical exploration on the C-end. At present, its MR glasses Nreal Light have been sold in Japan, South Korea, the United States, Europe and other places.
As one of the few AR manufacturers in China to advance to the C+ round of financing, how is Nreal developing? Is the current consumer AR market waiting for development opportunities?
1. Multi-party capital platform
Most of the Nreal team is from the "Zhejiang University Department". Founder Xu Chi was born in 1984, graduated from Zhejiang University with a bachelor's degree in electronic information engineering, and obtained a doctorate in electrical and electronic engineering from Minnesota State University in 2016, and has worked in NVIDIA and Magic Leap.
In addition to Xu Chi, in the founding team, Xiao Bing, co-founder and chief optical scientist, Wu Keyan, head of algorithm, and Zhang Yu, head of software research and development, graduated from Zhejiang University, bringing together multiple technical backgrounds such as optoelectronic design, AI, software research and development, and computer vision.
The comprehensive team technology gene has helped Nreal gain a lot of favor in the capital market. Since its inception in 2017, Nreal has completed five financing rounds, accumulating more than $200 million.
Most of its shareholders come from three types of backgrounds:
One faction is Sequoia China, Hillhouse, Hongtai Fund, CICC Capital, Shunwei Capital and other well-known PE/VC institutions;
One faction is industrial capital such as Gimpo Science and Technology Investment and Guangzhou Development Zone Nova Equity Investment Fund;
There is also a more special faction, including CVC or Internet companies such as NIO Capital, Kuaishou, and iQiyi, who mostly have close business cooperation with Nreal.
Taking this round of financing as an example, Alibaba and Nreal, which led the investment, have reached a cooperation through DingTalk. In May 2020, Nreal and DingTalk, a smart mobile office platform under Alibaba, jointly released the "Nreal AR Glasses Set Pro Edition" based on online office. According to reports, the glasses are adapted to the DingTalk online working platform, and users can enter the 3D virtual working environment combined with reality through AR glasses, and feel remote communication and collaboration immersively.
In addition to the office scene, Nreal explores more around the "movie experience".
In 2021, it and NIO jointly released AR glasses adapted to NIO ET5, a new model of NIO, which looks similar to fashion sunglasses and aims to bring users a large-screen, 3D viewing experience in the car.
At the 19th China International Digital Interactive Entertainment Exhibition in 2021, Nreal also demonstrated the cooperation effect of AR glasses with content platforms such as Kuaishou and iQiyi. For example, the audience put on AR glasses, you can watch the virtual idol AC Niang, who is popular in the Kuaishou second dimension, dance in the air and interact with it, and you can also open the iQiyi "Christmas Eve" AR MV to watch the star holographic concert.
Through strategic cooperation with more and more consumer brands and Internet manufacturers, Nreal AR glasses products have brushed enough presence and accelerated the process of market education.
2. Open the overseas consumer AR market
Although Nreal has cooperated with domestic manufacturers frequently in the past year, Nreal first started from overseas markets.
In May 2019, Nreal's first-generation product, Nreal Light MR, was officially released at the International Consumer Electronics Show. Prior to this, augmented reality devices were basically helmet-based, and Nreal took the lead in making them into glasses and adapting them to smartphones.
In August 2020, the product was first released in South Korea, and in the following year, Nreal Light was sold in Japan, Spain, Germany, the United States and other places.
Taking the US market as an example, according to the official introduction, Nreal Light weighs 106 grams and is equipped with 2 SLAM cameras, an RGB camera, a space sensor and a distance sensor. The inner lenses are divided into two layers, with projection equipment installed in the middle space and speakers mounted on both sides of the temple. In addition to this, the glasses are connected with a USB-C cable for connecting with smartphones.
In order to adapt to the hardware, Nreal has developed a 3D operating system Nebula, which can port the existing Games, Movies and other Android applications in the mobile phone to the glasses, presenting the effect of IMAX cinema and large-screen games.
Nreal's second-generation product, Nreal Air, was based on the first generation and did a performance iteration, which was first released in Japan in February this year. The new product features large-screen viewing function, Micro OLED screen, with a field of view of about 46 degrees (FoV) and 49 pixels / degree angle resolution (PPD), and has obtained the hardware-level low blue light and no strobe dual certification issued by T V Rheinland in Germany, with eye protection effect.
The reason for choosing to open the market overseas, according to the founder Xu Chi revealed in a public interview, on the one hand, overseas users such as Japan and South Korea have a high acceptance of AR devices, and overseas are relatively more mature in the developer ecology, upstream and downstream of the industrial chain, and user cognition. On the other hand, these regions are among the best in the world for 5G commercialization coverage, and 5G operators have very strong sales channels that can help Nreal quickly open up the local market. In the United States, Nreal glasses are sold through the telecom operator Verizon online mall and more than 20 offline stores.
Relying on Nreal Light and Nreal Air, around the three-dimensional movie viewing experience and game experience, Nreal is exploring the possibility of landing with consumer goods brands, content manufacturers and cultural tourism companies around the world. At present, its partners include fashion brands JOSEPH, WEILAI, cultural tourism service provider Zhongding Tianxia, Black Shark Game Company, etc.
On the B side, Nreal is also involved. In 2019, it cooperated with Deutsche Telekom to launch field service remote assistance solution FieldAdvisor, which uses a mobile phone equipped with Qualcomm chips as an computing unit and control carrier, which can support field service personnel to contact remote technical experts in real time through AR glasses, share perspectives, and communicate with each other on-site conditions.
According to Nreal's official disclosure, in 2021, it will officially launch the sale of enterprise-level solutions in the Chinese market, and will explore B-end digital transformation solutions with more ISVs and developers. At present, Nreal has signed it supplier Changhong Jiahua as the exclusive agent for its enterprise-level products.
3. 2022, the first year of consumer AR?
In 2022, the "first year of AR" argument began to spread in the market again. Hu Guoqing, head of the 5G research group of the Shenzhen Research Institute of Peking University, said in a public interview that the popularity of the concept of "meta-universe" has driven the development of AR consumer-grade glasses, and on the whole, 2022 can be called the first year of AR consumer-grade glasses.
Since the second half of last year, the market heat of consumer-grade AR has gradually accumulated. Xiaomi, OPPO, and Huawei have successively released a new generation of smart glasses, which has stirred up a wave of smart glasses.
Recently, even Luo Yonghao, who has built a hammer mobile phone, also wants to enter the AR track, he posted on Weibo on the 18th: "The finale of the second part of the entrepreneurial trilogy of "Zhen Huan" has not yet been officially released, and the third of the entrepreneurial trilogy has already been established, although the name has not been raised."
However, the mobile phone manufacturer's equipment function is simple, and it is not completely "AR glasses".
OPPO is relatively ahead of the curve in its exploration of AR glasses. In December 2021, OPPO released a new generation of wireless split AR glasses, equipped with a Snapdragon 865 chip, using BirdBath optical technology and a micro LED screen.
The product provides four control modes of touch, voice, gesture and head movement control, which can present green font on the lens and provide simple functions such as information prompts, teleprompters, and navigation. At present, the product has been officially put on sale in OPPO mall, priced at 4999 yuan.
Picture: OPPO AR glasses, image source: OPPO mall
Compared with OPPO, Huawei and Xiaomi are more in the concept stage.
In September last year, Xiaomi released the AR glasses exploration version unveiled, the appearance is no different from ordinary glasses, weight 51g, the use of MicroLed optical waveguide technology, built-in microphone and software algorithms, not only can call, but also support photography, navigation, real-time translation, than OPPO glasses to increase the translation and other AI functions.
However, all this is still in the conceptual stage, and the release time of Xiaomi AR products has not yet been announced. According to industry insiders, the reason why Xiaomi chose to release the concept version of AR glasses on the occasion of Apple's autumn conference and OPPO's official announcement of the Find X3 Pro photographer's edition is that there is no shortage of suspicions of "grabbing hot spots".
Huawei's AR plan has also been in a state of "holding the pipa and half covering the face". As early as March 2020, Huawei applied for an invention patent called "AR glasses", exposing the SKETCH OF AR glasses for the first time. On February 25 this year, the official website of the enterprise check showed that Huawei has obtained the AR patent authorization, and the new sketch shows the module, adjustment architecture, frame and other components.
However, at the Huawei winter new product conference at the end of last year, Huawei announced a smart glasses priced at 1699 yuan, which supported functions such as telephone calls, listening to music, all-weather weather broadcasts, news reminders, cervical spine health care, etc., but did not contain AR functions.
It is not difficult to see that Huawei's AR technology is still under development and has not yet reached the commercial level.
In the field of AR consumer terminals, it is startups that move faster than mobile phone manufacturers. In China, Nreal, Thunderbird Innovation, Rokid and other manufacturers have launched consumer-grade AR devices, but the functions have different emphases.
Rokid's new Rokid Air, released in May 2021, is the first to land in the field of education. According to reports, the glasses cooperate with Liulishuo to allow users to naturally converse and learn languages in immersive scenes through 3D virtual AI teachers and users.
Thunderbird Innovation officially released the Pioneer Edition of Thunderbird Smart Glasses in October last year, which is the industry's first binocular full-color MicroLED holographic optical waveguide AR glasses, which currently support basic information display, photography, translation and other functions, and will be followed by real-life navigation, intelligent control, car mirror linkage, multi-screen presentation and other functions.
In 2022, when consumer-grade AR is just starting out, the market presents a "princely division" side: start-up companies are busy releasing new products, but the positioning is uneven, projection screens, information displays, educational interactions... They have become the grippers of consumer-grade AR; in order to occupy the pit in AR, some manufacturers do not hesitate to lose money and make money, and some manufacturers have no products and rush to release concept versions and advance versions.
The motivation for everything may be just to brush up the brand presence in the early stage of industrial development, on the one hand, "do it first and then think, jog in small steps", starting from the simplest basic function, first cultivate the user's cognition and habits in some scenes, and then slowly hand over time, iterate on technology, cultivate the industrial chain, and prepare for the day of the outbreak.