Finnish VR and AR are growing rapidly, and attracting global notice
Augmented reality (AR) developer Magic Leap has announced that it will open an office in Helsinki to take advantage of the country’s ICT strengths in optics as well as graphics hardware and software, as reported by Dennis Mitzner in TechCrunch.
Earlier this year, Magic Leap raised $793.5 million in a Series C round led by Alibaba – both AR and virtual reality (VR) have significant growth potential in China in the near future, especially in e-commerce, gaming, and film industries. Google, KPCB, and Andreessen Horowitz has also been a heavy backer in the company, which recently also opened an office in Seattle, despite rumors of internal strife going on there.
Industry speculation now attends the possibility that Magic Leap is preparing for a 2017 release of its Sensoryware line, though the company declined to offer any specifics about when and if it will debut its prototype AR glasses and an accompanying pocket computer.
The company’s office expansion is in part driven by the fact that it wants to attract talent in these hubs since its headquarters, in Florida, is reportedly not an easy relocation sell to potential employees, so it is better to bring the offices to them, wherever they may be.
And Helsinki is increasingly one of those places for European markets. It is yet unclear what, if any, local partnerships have been established, though the secretive American company will surely be offering top euro for local hires with prior experience in the AR and VR sector.
The post-Nokia world
Such talent will not be in short supply. Arguably, the decline of Nokia’s fortunes as a global ICT company have been a boon to the startup industry there. Employees left Nokia to pursue their own projects and the government – not wanting Finland to lose its standing as a tech powerhouse – was usually supportive of these new enterprises through the Finnish Funding Agency for Innovation, Tekes.
Finland, alongside other Nordic countries such as Iceland and Sweden, has seen a lot of growth in VR and AR. The Nordic VR investment sector has added over $230 million from mid-2015 onwards. Though Finland is a smaller market area than its neighbors around the Baltic Sea, as Geektime previously reported, it has “rich collaboration and knowledge transfer between startups and Finland’s higher education institutions and R&D centers” as well as assistance from the Finnish government to startups and Nokia’s established presence in this, its home county.
In summer 2016, Finland hosted northern Europe’s largest VR-zone for a game developer assembly. Finland’s strong ICT industry has seen several local VR and AR startups emerge in recent years, such as Vizor, Minefield Games, and Thinglink. Unity is one Finnish gaming company that has gone global, and now invests heavily in VR and AR, recently showcasing best industry practices at an Asia-Pacific tech conference. (Yet another sign of how important the China market will be for VR and AR developers.)
Though a significant amount of VR work in Finland centers on the country’s lively gaming industry, other applications are being pursued. Vizor, for instance, has potential across education and advertising services, and Thinglink offers a wide range of editing options on a 360-degree platform.
There is a local connection as well for Magic Leap in Finland: two of the company’s executives previously worked in Finland for Nokia, which itself has entered the VR market with the 360-degree Ozo camera, a high-end production tool available in Europe, the US, and China for $45,000. Despite the steep price its sales, “have been better than anticipated”, and it is being bought up by big name players such as LeEco and Disney.
Although Silicon Valley is interested in expanding into Finland, Finnish startups are for now focusing close to home. “Traditionally, Finnish companies have had everything they need right there in Finland,” a Finnish marketing expert writes on Quora, “including talent and funding. Competing for those resources in Silicon Valley is beyond the financial means of most startups.”
To go global, Finnish companies will need to raise more capital at home first. Magic Leap’s presence may help bring in what The Nordic Web says is vital to the success of the VR industry there. Local financing is somewhat limited, and risk-averse, and according to industry experts, “Finland desperately needs larger internationally-minded VCs” and in particular, “late stage maverick investors willing to take risks”, as well as further government support.