Snap Inc. announced on 21 May 2021 that it is acquiring WaveOptics, a startup that designs and manufactures waveguides for AR wearables, in a USD 500M deal. WaveOptics makes the waveguides and projectors used in AR glasses. These overlay virtual images on top of the views of the real world someone wearing the glasses can see. Snap worked with WaveOptics to build its latest version of Spectacles.
Terms of the deal: Snap will pay over US$ 500 million in a cash-and-stock deal. The first half will be paid in the form of stock when the deal officially closes. The remainder will be payable in cash or stock in two years.
WaveOptics had raised around US$ 65 million in funding from investors that included Bosch, Octopus Ventures, Stan Boland (veteran entrepreneur in the UK, most recently at FiveAI) and Ambarish Mitra (the co-founder of early AR startup Blippar).
Founded in 2014 by David Grey and Sumanta Talukdar, WaveOptics displays are designed to overcome the three major challenges for AR wearables – design, cost and optical performance. Its waveguides are customisable to meet the demands of any customer and can be manufactured at scale, delivering high-quality AR images. WaveOptics was founded in Oxford.
The technology behind WaveOptics drastically compresses the size and load of the hardware needed to process and display images. It thus provides a much wider and more flexible range of form factors for AR hardware.
WaveOptics claims that over 70 percent of its research and development team have PhDs with expertise in nanophotonics, optical design and the commercial production of head-mounted displays. WaveOptics has a mission to enable mass adoption of AR in all major market segments, including industrial, enterprise and consumer. It has over 100 employees and is scaling fast, in the UK and internationally with offices in China, Taiwan and the US.
With this deal, Snap would be making the startup’s technology exclusive to itself. Snap has acquired at least three other startups since January, including Fit Analytics for an AR-fuelled move into e-commerce, Pixel8Earth and StreetCred for its mapping tools. This deal marks Snap’s biggest acquisition to date in terms of valuation.
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