A participant tries on Nreal Mixed Reality glasses at the MWC Shanghai exhibition in Shanghai, China on Tuesday, February 23, 2021.
Qilai Shen | Bloomberg | Getty Images
GUANGZHOU, China – Chinese augmented reality (AR) glasses manufacturer, Nreal, has raised $ 100 million to fund international expansion and develop new products.
Augmented Reality refers to a technology that makes it possible to broadcast digital images over the real world, and it’s an area that the world’s largest tech companies are investing in.
The round of funding values Nreal at $ 700 million, a person with direct knowledge of the matter told CNBC. The person was not allowed to speak publicly about the rating.
Nreal did not want to comment on the rating.
Chi Xu, CEO of Nreal, told CNBC that the company plans to spend the money on research and development as well as expand its presence worldwide.
“China is definitely a huge market, and (we plan) to enter that market next year, and so is the US and maybe more countries,” said Xu.
Nreal has not yet launched its AR glasses in China, but its flagship product – the Nreal Light – has been sold in a handful of markets such as South Korea, Japan, and Spain.
Nreal Light are lightweight glasses that are connected to a smartphone. Users can then experience so-called mixed reality apps, in which digital images of the real world are superimposed.
The start-up’s supporters include a number of major investors, including Nio Capital, the investment arm of the electric car manufacturer Nio, and the venture company Sequoia Capital China.
Xu called Nio Capital a strategic investor and sees potential for the two companies to work together.
“Having AR and EV (electric vehicles) together can be very interesting in the future … I can be sure that there will be more and more EVs on the streets. People will spend more time in their cars, a combination of AR and the car that will open up a lot of other possibilities. “
New product launch
Xu said Nreal will be launching a new product next week and couldn’t give too many details before launching it.
However, the CEO said the new glasses will have a “completely new design” and will be lighter, more comfortable and cheaper than the current Nreal Light model.
“This lower-priced product can penetrate other markets such as China and elsewhere much more easily,” said Xu.
The new glasses will continue to be plugged into a phone, and Xu hopes the new features will encourage people to use them every day.
Global technology giants are enthusiastic about augmented reality.
Apple CEO Tim Cook has called AR the “next big thing” and the iPhone maker is reportedly working on a headset. Facebook, Microsoft, Google and other technology companies are also investing in augmented reality.
Xu said he welcomed the competition from these titans. “I think the best product will win,” he said.
New business models
Nreal has its own operating system called Nebula that runs on its headsets. Like Apple with iOS on iPhones, developers can create apps for Nebula that people can then use through Nreal headsets.
Having compelling apps on AR headsets will be key to their success and Nreal is trying to attract developers to Nebula. The company currently has 8,000 developers on the platform.
Apple’s model is based on the fact that gross sales from purchases in apps that are sold through its app store are typically reduced by 15 to 30%. In this way it generates part of its service revenues.
But this model has come under fire. Developers were not allowed to bill users directly for in-app purchases. Instead, they had to go through Apple’s in-app payment system. Then Apple would make a cut.
Epic Games, the developer of the hit game “Fortnite”, filed a lawsuit against Apple in August last year. This month, a judge issued an injunction stating that Apple cannot prohibit developers from providing links or other communications that discourage users from making Apple in-app purchases.
“We have seen a lot of changes in Apple’s business model. With the recent lawsuit between Apple and Epic, people will be rethinking that business model,” Xu said.
“We should offer developers a friendlier business model.”
The CEO said this would mean lowering the commissions an app store operated by Nreal can take. It could also mean offering more services to developers, such as: B. Marketing and help in improving their products.
Xu called it a “win-win” situation.
While Nreal is focused on expanding products and countries, Xu told CNBC in a July interview that the company plans to go public within five years.