Spectacles glasses maker Snap has agreed to purchase WaveOptics for more than $500 million. WaveOptics provides Snap’s augmented reality displays for the glasses. Snap’s largest deal to date highlights the company’s long-term belief that augmented reality eyewear will one day become a mainstream product.
As a display technology company, WaveOptics makes waveguides, a type of transparent glass surface that allows virtual objects to be overlayed on a real world through light projectors and waveguides. WaveOptics displays are used in Snap’s new Spectacles, which the company is using only to give AR effects developers.
According to PitchBook, “WaveOptics was founded in the UK in 2014 and has raised $65 million in funding to date”. Steen Strand, Snap’s hardware division director, will now oversee the roughly 125 people on the team. Snap now pays for half of the deal in stock, and in two years it has the option of paying for the other half in cash or stock. The acquisition was confirmed by a Snap spokesperson.
This purchase gives Snap a key piece of a rapidly growing, nascent industry – “the maker of AR glasses WaveOptics is continuing to supply Snap with it’s waveguides and working with Snap on customized optical systems”, said a Snap spokesperson.
The purchase of WaveOptics is partly a defensive move
Snap is partly defensive in buying WaveOptics nonetheless. Some of its major competitors are developing their own waveguide technology in preparation for the release of AR glasses. A team dedicated to building waveguides has been posted by Google, which launched Google Glass in 2013. As early as next year, Apple plans to announce a holographic headset made by Akonia, the maker of waveguide holograms, facebook CEO Mark Zuckerberg believes that augmented reality glasses will “redefine our relationship with technology” one day. He told the Wall Street Journal that Facebook is developing custom waveguides for AR glasses.
In contrast, WaveOptics intends to produce AR displays that can be widely adopted. According to the company, the thinnest color waveguide, ever was unveiled in February 2020. It also announced several months ago that it would support prescriptions with a waveguide.
In comparison to Microsoft’s Hololens, Snap’s WaveOptics technology gives Snap Spectacles a smaller field of view, or 26.3 degrees. With Snap’s glasses, users can view its augmented reality effects, known as Lenses, just as brightly indoors and outdoors. Battery life is reduced to 30 minutes as a tradeoff. As well as weighing 134 grams, the glasses are extremely heavy.
WaveOptics is taking quite a lot of Snap’s money now, but it will be many years before the technology is ready for the general public. In a recent interview with The Wall Street Journal, Snap’s CEO Evan Spiegel said, “it will take about ten years before AR glasses are compelling enough for widespread adoption.”
As Spiegel told CNBC following the publication of this story on Friday, the company has been developing waveguides with WaveOptics for “many years” now.
He explained that these components are extremely sophisticated and complex. Spectacles’ future is directly affected by this long-term investment.
WaveOptics’ situation? Pretty good!
Although Snap recently acquired Instagram, its valuation is the highest it has ever been. WaveOptics continues to command a premium price not only because it has a team of scientists behind it, the company also has 12 filed and pending patents — but also Snap’s financial and existential commitment to not only being at the center of not just social apps and AR, but also hardware, and setting both the pace and agenda for how and where the technology will be utilized..
That’s been a tough and not always rewarding place for it to be, but it’s kept hardware in the mix as a key pillar through the years as part of its long-term strategy.