Chinese AR glasses firm Nreal raises $100 million in new funding

An attendee tries a pair of Nreal mixed-reality glasses on the MWC Shanghai exhibition in Shanghai, China, on Tuesday, Feb. 23, 2021.

Qilai Shen | Bloomberg | Getty Photographs

GUANGZHOU, China — Chinese language augmented actuality (AR) glasses maker Nreal has raised $100 million to fund worldwide enlargement and develop new merchandise.

Augmented actuality refers to expertise that permits digital pictures to be imposed over the true world and it is an space that the world’s largest expertise firms are investing in.

The funding spherical values Nreal at $700 million, an individual with direct information of the matter instructed CNBC. The individual was not approved to talk publicly in regards to the valuation.

Nreal declined to touch upon the valuation.

Chi Xu, CEO of Nreal, instructed CNBC that the corporate plans to spend the cash on analysis and growth in addition to increasing its footprint globally.

“China is certainly an enormous market, and (we plan) to enter that market subsequent 12 months, and likewise the U.S .and perhaps extra international locations as nicely,” Xu mentioned.

Nreal has not launched its AR glasses in China but, however its flagship product — the Nreal Gentle — has been retailing in a handful of markets together with South Korea, Japan and Spain.

Nreal Gentle is a pair of light-weight glasses which connects to a smartphone. Customers can then expertise so-called combined actuality apps, the place digital pictures are superimposed over the true world.

The beginning-up’s backers embrace numerous main traders together with Nio Capital, the funding arm of electrical carmaker Nio in addition to enterprise firm Sequoia Capital China.

Xu known as Nio Capital a strategic investor and sees a possible for the 2 firms to work collectively.

“Having AR and EV (electrical autos) collectively, that may be very fascinating going ahead … there’s one thing I could be certain (of) is there’s going to be increasingly more EVs on the streets. Individuals will spend extra time of their vehicles, so a mixture of AR and the automotive, that can unleash a number of different potentialities.”

New product launch

Xu mentioned that Nreal will introduce a brand new product subsequent week and could not give too many particulars forward of its launch.

Nonetheless, the CEO mentioned the brand new glasses can have a “full new design,” and can be lighter, extra snug and cheaper than the present Nreal Gentle mannequin.

“This product with a cheaper price level, this may be a lot simpler to penetrate these different markets, like China … and elsewhere,” Xu mentioned.

The brand new glasses will nonetheless plug right into a telephone and Xu hopes the brand new options will encourage individuals to make use of it every day.

International tech giants are getting enthusiastic about augmented actuality.

Apple CEO Tim Cook dinner has known as AR the “next big thing” and the iPhone maker is reportedly engaged on a headset. FacebookMicrosoftGoogle and different expertise firms are all investing in augmented actuality too.

Xu mentioned he welcomes the competitors from these titans. “I feel one of the best product will win,” he mentioned.

New enterprise fashions

Nreal has its personal working system known as Nebula that runs on its headsets. Like Apple with iOS on iPhones, builders could make apps for Nebula which individuals can then use through Nreal headsets.

Having compelling apps on AR headsets can be key to their success and Nreal is attempting to lure builders onto Nebula. The corporate presently has 8,000 builders on the platform.

Apple’s mannequin depends on it taking sometimes a 15% to 30% minimize of product sales from purchases in apps distributed by way of its App Retailer. That is the way it generates a few of its providers income.

However that mannequin has come beneath fireplace. Builders weren’t allowed to cost customers immediately for in-app purchases. As a substitute, they needed to undergo Apple’s in-app funds system. Then Apple would take a minimize.

Epic Video games, the developer of hit sport “Fortnite,” introduced a authorized problem towards Apple in August final 12 months. This month, a judge issued an injunction that mentioned Apple cannot prohibit builders from offering hyperlinks or different communication directing customers away from Apple in-app buying.

“We now have been seeing a number of adjustments with Apple’s enterprise mannequin. With the newest lawsuit between Apple and Epic, persons are going to rethink this enterprise mannequin,” Xu mentioned.

“We should always provide a extra pleasant enterprise mannequin to builders.”

The CEO mentioned that may imply decreasing the commissions that an app retailer run by Nreal can take. It might additionally imply offering extra providers to builders, similar to advertising and serving to them to enhance their merchandise.

Xu known as it a “win-win state of affairs.”

Whereas Nreal is specializing in increasing merchandise and international locations, Xu told CNBC in a July interview that the corporate is seeking to go public inside 5 years. | Chinese language AR glasses agency Nreal raises $100 million in new funding


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