Nreal Announces New AR Glasses, $100 Million Investment at $700 Million Valuation
With the fresh infusion of capital, Nreal is planning to grow more in the international markets and build new products. New AR glasses set to be unveiled next week.
Nreal, the Chinese augmented reality (AR) glasses manufacturer has raised over $100 million to power its international expansion, in a funding round where the company was valued at $700 million.
The company’s flagship mixed reality product, the Nreal Light mixed reality glasses which connect to a smartphone, has already seen some global success. Nreal mainly markets the Nreal Light glasses as smartphone data glasses via mobile providers across Asia and Europe. The company has already gone into partnerships with Vodafone and Deutsche Telekom along with other leading carriers across Asia.
Nreal Light’s biggest selling point is its slim form factor. The mixed reality glasses almost manage to pull off the look of normal sunglasses even though they feature cameras and displays among other sophisticated functionalities that you wouldn’t find in normal sunglasses. In spite of the groundbreaking design and functionalities, Nreal Light glasses still have some weaknesses and the mixed reality glasses’ application scenarios along with associated software are yet to hit the right spot.
Nreal Notches Up $100 Million in Funding Round
Nreal is now announcing that it has clinched $100 million in funding round, funds that will go into international expansion and in the development of new mixed reality products. The latest mega funding round valued the company at $700 million. On Twitter, the company merely retweeted news of the funding round describing it as “what the future holds”.
Nreal will likely use the new infusion of cash to fund research and development as well as for its market entry in China and the US. Across Asia, Nreal sells its Nreal Light mixed reality glasses in South Koreas and Japan, among other Asian countries.
Nreal CEO Chi Xu describes China is a big market that the company plans to enter next year. The company is also planning to enter the US market, and probably, some other markets.
Nreal is yet to launch its Augmented Reality glasses in the China market even though its flagship product, the Nreal Light, is already retailing in a number of markets such as Japan, South Korea, and Spain.
The Nreal Light mixed reality glasses are a pair of lightweight mixed reality glasses which connect to smartphone from which they draw most of their computing functionalities. Nreal Light users can experience the mixed reality apps in the Nreal ecosystem whereby digital images and experiences are superimposed onto the real world.
In the latest funding round, Nreal has been backed by a series of major investors including Nio Capital which is the investment arm of the electric car maker Nio. Also participating in this funding round is Sequoia Capital China. According Xu, Nio has been a strategic investor an Nreal sees great potential in the two companies working together as a “combination of AR and the car” is sure to “unleash a lot of other possibilities” as people spend more and more time inside their cars.
A New Product Launch
The Nreal boss also revealed that the company is set to launch a new product next week although he didn’t divulge many details on the upcoming product launch. Xu, however, revealed that the new Nreal glass will feature a “complete new design” and that they will also be lighter, cheaper and more comfortable than the current Nreal Light model. As a result, Xu expects that the new glasses will be able to more easily penetrate the other markers like China.
The new Nreal mixed reality glasses will still have to plug into a phone and the Nreal boss hopes that this functionality will encourage more people to use the mixed reality glasses on a daily basis.
This is all happening at a time when many global tech giants are showing strong interest in augmented reality. Apple boss Tim Cook has in the past described Augmented Reality as “the next big thing” and the iPhone maker is rumored to be working on a headset. Other leading tech giants including Google, Facebook and Microsoft have poured considerable resources into the development of augmented reality. Nreal boss appears unfazed by competition from these giants and believes the best product will simply win the race.
Nreal has a new business model, too. The company has its own operating system known as Nebula which runs on its Nreal headsets. The Nebula is an Nreal ecosystem where developers can even build apps that run on the Nreal headsets just as the Oculus ecosystem features hundreds of apps that run on its websites.
There is no doubt that the availability of compelling apps on Augmented Reality headsets will go a long way in driving the success of the major AR hardware players. Nreal is keen on capitalizing on this by luring developers into its Nebula ecosystem. At the moment, Nreal has about 8,000 developers on its platform.
Apple’s model, on the other hand, is commission based and is based on skimming off 15% to 30% on the gross sales from app purchases in apps that are distributed via its store. This is a major source of the company’s services revenues. However, this model has come under heavy criticism as developers in the Apple ecosystem have not been allowed to directly charge their users for the in-app purchases. Instead, all purchases must pass through Apple’s in-app payments system upon which Apple takes its cut.
Fortnite developer Epic Games took Apple to court last year and had a partial victory as the judge issued an injunction that Apple can’t prevent developers from providing links as well as any other information that directs users from Apple in-app purchasing.
Drawing conclusion from Apple’s in-app payment woes with its developers, Nreal boss Xu says that he is looking at providing “a more friendly business model” to its developers. This could take many forms such as reducing the commissions that an Nreal-run app store can take from users to offering more services for developers like marketing and helping them with product improvement in what Xu calls a “win-win situation.”
As it expands its product line and market reach, Nreal has also expressed its intention to go public in five years.