August 26, 2022 update:
Nreal announces additional funding of $15 million. The money comes from trading company IICombined, which has the Gentle Monster eyewear brand in its portfolio, among other things. Since its inception, Nreal has raised $260 million.
“This investment is exciting for connecting and exploring the frontiers of fashion and technology,” said Hankook Kim, Co-Founder of Gentle Monster and CEO of IICOMBINED. “We will take advantage of the strengths of both sides and make joint efforts to create more opportunities.”
Nreal currently has two tech glasses, Nreal Light glasses and Nreal Air display glasses. The company intends to develop more devices and expand into other markets. Currently, Nreal eyewear is available in the United States, United Kingdom, Japan, South Korea, Spain, Germany, and China, with some affiliate sales partnering with mobile carriers such as Telecom and Vodafone. The additional capital will be used to expand the company’s presence in the United States, currently its strongest market.
At an event in China a few days ago, Nreal unveiled its vision for the future of AR. You can watch the show in the video below.
Original article from March 30, 2022:
Metaverse arms race: Alibaba joins Nreal
A multi-million investment from Chinese e-commerce giant Alibaba is expected to boost the development of AR glasses maker Nreal.
The Alibaba Group is, on its own account, the largest IT group of companies in China. The most well-known product in its portfolio is Alibaba.com, an Internet-based B2B e-commerce platform.
In the great Metaverse arms race, Alibaba joins Nreal, contributing $60 million in its third round of funding. In total, Nreal’s investor capital amounts to 245 million dollars. Nreal’s estimated value is expected to be between $700 million and $1 billion.
Nreal wants to grow
In favor of Nreal, strong marketing, international distribution partnerships with telecommunications groups in the United States, Europe and Asia, and rapid product development.
Like other AR glasses manufacturers, however, Nreal cannot change the rules of physics, resulting in typical image quality, frame size, and form factor issues in its Nreal Light AR glasses. . The operating software can also be further improved.
Perhaps because of this, Nreal recently announced the display-only Nreal Air glasses without advanced AR features. Both glasses are aimed at the public, with the main purpose of use being digital displays meant to replace a conventional monitor or TV – which is probably the biggest potential for AR glasses in the medium term.
Nreal plans to use the capital raised to increase investment in research and development, expand into other markets and strengthen partnerships to create even more content for users, the company writes.
Alibaba was an early investor in Magic Leap
By comparison, Magic Leap had access to around $2.6 billion in investor capital at its peak. At the time, the company’s value was estimated at between six and eight billion US dollars. This means it had a lot more money at its disposal than Nreal has today – but nowhere near enough to compete with giants like Meta or Apple.
After Magic Leap’s plan to develop AR glasses for everyone initially proved to be technically impossible, the startup’s estimated value dropped to around US$500 million. Magic Leap restructured its staff, laid off hundreds of employees, and now sells the upcoming Magic Leap 2 AR glasses only to businesses.
This is where it gets interesting: Alibaba was one of the earliest and biggest investors in Magic Leap, along with Google, but at the time it was much more generous than today with Nreal. Alibaba reportedly contributed around US$200 million even in the early days of Magic Leap, years before the first product.
In 2016, the two companies even showed meticulously edited videos of how they envision the future of AR shopping.
At the time, former Magic Leap CEO Rony Abovitz called Alibaba “the first choice to enter the Chinese market.” Magic Leap used to have around 1800 employees, while Nreal currently has 400.
There is another parallel between Nreal and Magic Leap: Nreal founder Chi Xu worked at Magic Leap as a software developer from July 2015 to August 2016. He then moved on to start his own company. Magic Leap sued Xu for alleged technology theft, but the suit was dismissed by a US court in mid-2020.
Alibaba’s investment is rather low
Compared to domestic and international competition, Alibaba’s investment in Nreal is low. His relative reluctance could be linked to his experience with Magic Leap.
For a domestic comparison, Chinese internet company Tencent is reportedly working to acquire Black Shark, a maker of gaming smartphones and smartphone accessories, and retool it for XR hardware and software. Estimated buyout amount: $400 million.
TikTok operator Bytedance acquired Pico, one of the world’s largest VR headset makers, last summer for around $600 million. Following the investment, Bytedance staffed Pico’s management with TikTok veterans for content growth and entered into a partnership with Qualcomm, the leading chipmaker for standalone XR glasses.
However, Chinese investment pales in comparison to their Western tech rivals: Meta has been investing billions of dollars in XR development for years. At Apple, Google and Microsoft, the exact figures are not known, but several hundred specialists in the departments concerned and regular takeovers of start-ups should also take them well over the billion mark.
Learn more about the XR industry: