Augmented reality lens maker Lumus conjures up a $6M investment from Alibaba
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The DK50 Source: Lumus

The Chinese mega investor throws in an apparent vote of confidence behind this Israeli AR tech firm. But what does it mean for Alibaba’s plans in augmented reality?

Israeli financial daily Calcalist reported this morning that Israeli augmented reality lens maker Lumus has received $6 million from Chinese internet powerhouse Alibaba, marking yet another investment by the company in both AR and the Israeli tech market.

This announcement comes nearly a month after Rehovot-based Lumus’s release that they had pulled a $30 million Series C round in December from HTC and Quanta Computer, an electronics manufacturer from Taiwan. Including the $15 million that was listed as their Series B financing back in June, Lumus came out proudly, stating that they had brought in $45 million in funding for 2016.

Founded by Yaakov Amitai in 2000, the company traces much of their start back to military hardware that was used by pilots in their helmets for navigation and other flight needs in the heads up display. Since then, they have moved to supplying lenses for the B2B AR market.

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 lens, and the waveguide then directing it back to the eye.

In looking for a comment on what Lumus intends to do with their latest injection of capital, other than perhaps more development, Geektime reached out to the company but was unable to speak with a representative at the time of publishing. Perhaps if Alibaba had thrown in another million or two, they could hire someone to answer the phones.

Alibaba’s march towards augmented reality dominance

Considering Alibaba’s scale, $6 million is really not a significant sum for an investment. However, what is interesting here is the way in which the internet giant is lining their ducks up in a row to enter the the augmented reality market in full force.

Looking at the stakes they have thrown down in the past year, a couple of names immediately pop up.

First is their contribution to Magic Leap’s $800 million Series C round in February, of which they are reported to have put up a quarter of the funds. While there is talk that the Florida-based company has hit a couple of snags as of late, their vision seems to have caught the attention of enough heavy hitters to garner them a valuation of about $4.5 billion.

Looking a little more local, they put $15 million behind InfinityAR at the start of November, helping the company to get back on track after a weird stint as part of a public company. Word is that they are working on something with the potential to upend the AR market, and give Alibaba an edge in this space, potentially even against some of the bigger corporates that already have products on the market.

Now with a smaller capital backing of $6 million being put into Lumus, it stands to reason that Alibaba is setting up their supply chain for deals with their other associated companies. If this is indeed a strategic investment, then we may start seeing parts designed at Lumus making their way into either InfinityAR’s products or other devices in the Alibaba ecosystem. However for only $6 million, it is unlikely that they were able to gain any kind of exclusivity with Lumus for future transactions.

Considering how much Alibaba has put behind Magic Leap, all of these other investments feel like diversification. However, there is reason to believe that the products coming out from their Israeli startups could pay off much sooner and have an outsized influence on the general consumer market, which could be good news for the scene here as it looks to become a leader in the field.

So why exactly does Alibaba want to become a leader in the AR space? From one perspective as an e-commerce giant, there are plenty of shopping-related applications for this technology. Imagine seeing how you would look in a pair of pants without even trying them on. You get the idea. At the same time, as a massive company on a global scale, they want to stay ahead of the cure, positioning themselves to be a major player in this space. For as hot as AR and VR may be in the West, Asia — which is Alibaba’s home market  appears to be even more on board with the altered reality technologies.

Taking a step back, the question becomes how we will begin integrating AR into our day-to-day tech. Unlike VR which is meant to be used in a single location, and since we do not advise crossing the street in a VR headset, AR is meant for moving around. It will impact how we drive and interact with the world around us.

So where will we see it first?

Despite the fact that there are plenty of idiots walking around with the new Snap Inc glasses (or so I’m told), mainstream AR probably will not make its debut on glasses like the infamous Google Glass. For now the devices are too bulky and make the person stand out as a glasshole. Call me old fashioned, but I doubt that most adults are ready to go to that place yet. Then there are all of the privacy issues where people (justifiably) do not like the idea that someone could be constantly filming them and posting to social media, etc.

For the short term, we will probably see AR technology showing up in two places based on recent events.

The first is on home devices similar to Microsoft’s HoloLens. This device has captured our imaginations, showing us what is possible with AR. However, for the time being it is far too expensive and heavy for popular use. But this model for use at home or at the office could become quite popular if someone can address the two issues stated above.

Lumus could display directions, updates weather and other advisories while you drive (animation by Lumus)

The second is on our mobile phones. If we learned anything from the crime against humanity that was Pokemon Go this past summer, it is that enough people are more than happy to walk around like zombies, viewing the world around them through their phone’s screen. While not everyone is a lover and buyer of gadgets (yes, there are those unfulfilled people out there), everyone does have a phone that can carry content and act as a portal to the internet. Therefore the people who sell stuff online, whether apps, e-commerce, content, etc, have a strong interest in making sure that they have a hand in putting out the next generation of devices that we will be carrying in our pockets.

Samsung has thrown out the first pitch with their Gear VR series, but this is only the first step.

Following posts from VR/AR/all around tech guru who is fun at beach front parties at 2 in the morning Robert Scoble, it looks like Apple has a couple of cards up their sleeve looking ahead to the release of the iPhone 8 later this year. How exactly that will shape out is yet to be seen.

For now, until Alibaba decides to show its hand on the AR scene, the rest of us will have to sit on the sidelines, playing connect the dots.

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Gabriel Avner

About Gabriel Avner

Gabriel has an unhealthy obsession with new messaging apps, social media and pretty much anything coming out of Apple. An experienced security and conflict consultant, he has written for The Diplomatic Club, the Marine War College, and covers military affairs with TLV1 radio. He mostly enjoys reading articles wherever his ADD leads him to and training Brazilian Jiu Jitsu. EEED 44D4 B8F4 24BE F77E 2DEA 0243 CBD1 3F7C F4B6

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