The company produces what are known as optical engines, a critical part of the glasses and headsets used in the AR experience
In what is shaping up to be a very big year so far for investment in augmented reality startups, the Rehovot-based hardware developer Lumus announced today the close of their Series B round, bringing in $15 million in new funding.
The round was led by Chinese investors the Shanda Group, which has a strong background in online gaming, with participation from one of Lumus’ suppliers, Crystal-Optic.
In their previous round in 2012, they had garnered $6 million from Jerusalem Global Ventures and Vaizra Investments, which combined with today’s announcement and the $7 million in seed injections over the course of their history going back to 2000, brings the company to $28 million in total raised.
Founded by Yaakov Amitai in 2000, who developed much of the company’s early intellectual property, Lumus is at the center of the rapidly expanding AR industry that has reportedly already raised $1.1 billion in investments, together with VR, since the start of 2016.
The company produces what are known as optical engines, a critical part of the glasses and headsets used in the AR experience. An optical engine consists of two components, a micro projector and an embedded waveguide. These two parts are essential to the functionality of the glasses, with the projector sending the image to the lense, and the waveguide then directing it back to the eye.
Building next generation AR components in the new market
In speaking with David Goldman, Head of Marketing at Lumus, he describes the evolution of the company to Geektime and where they fit into the AR ecosystem. He says that during their first 8 years, before the technology had really come in as it is today, the company was focused on developing and protecting their IP. By 2010, they had brought their technology to market and started selling to the military sector, providing the components that go into fighter pilots’ helmets for their heads up displays.
An advantage that Lumus claims in its favor is their daylight-readable image functionality, with technology capable of providing a better quality output in bright settings. Goldman notes that this was an essential feature for them seeing as how they got their start working with pilots who had to fly above the clouds.
Then in 2014, they began targeting the B2B and Enterprise market, which has overtaken their military sales. They are now working with customers that build the end products like the AR glasses, visors, goggles, and headsets. Some of their clients include names like Thales, Atheer and DAQRI.
Since they are focused on building components, Lumus would not really be considered a competitor to companies that build complete sets like Meta, which announced this week that they had closed a whopping $50 million Series B.
“We’re the core enabling technology for AR glasses,” says Goldman, stating where he sees their place in the market. While there are a number of smaller startups that are working to enter this hot space, perhaps the only ones that they would be competing with are the companies that build the parts in house. However, big names like Epson, Magic Leap, HoloLens could just as easily become customers down the line.
Looking at the post funding period, CEO Ben Weinberger tells Geektime that, “Lumus plans to use the funds we just raised in three areas: increasing our R&D capabilities to seed the increasing number of smart eyewear product categories, ramping up production and increasing the investment in sales and marketing.”
Part of this R&D funding is being directed at building smaller and lighter optical engines that give headset designers more freedom to build sleeker devices. Goldman says to Geektime that they are developing an optical engine with a 60° degree field of view (FoV) will be ready in Q4, with hopes that they would be ready to ship sometime soon after in early 2017.
In a world where all video is now moving towards 360°, when it comes to AR, 60° is still pretty impressive, especially when compared with the 30° FoV from the HoloLens or Google Glass’s 15° FoV.
The fact that their supplier Crystal-Optic decided to invest in them, basically as a strategic investor, is a strong mark in Lumus’ favor. Also of note is the pouring on of investments in AR and VR from Chinese companies: Some are VCs, but far more are coming in as strategics.
With big names like Horizons Ventures, Lenovo, and Tencent having put money into Meta, while Alibaba piled on a quarter of Magic Leap’s $800 million Series C round that was confirmed back in February, there is a clear trend of Chinese investors seeing something truly powerful in the field of AR.
“The appetite for VR and AR tech in China, Japan, Korea and the rest of Asia is huge,” says Goldman, who believes that mass adoption could take root there even before the West. It might be cultural or it may fit into a long-term vision for how they see their economy developing, but it is fair to say that when the explosion in this kind of technology in Asia finally hits, it should not come as a surprise.
While there is interest in the U.S. and Europe, right now everyone is focusing on the enterprise market. No one is selling a consumer product yet, and Goldman predicts that for the next two years, the emphasis will be on selling to companies. He gives the example of going to see a car showroom and being able to see the same car in different colors using AR glasses.
For the time being, the consumer market for AR devices appears stuck, with most folks being priced out by the cost of the headsets.
“The price needs to come down for the consumers and that’s where everyone is focused,” says Goldman.