Snapchat company buys WaveOptics, maker of displays for augmented-reality glasses, for more than $500m amidst increased competition in emerging field
Snap has confirmed it is to purchase WaveOptics, a British company that makes augmented-reality (AR) components, for more than $500 million (£353m).
The deal, Snap’s largest ever, indicates the long-term importance Snap sees in AR devices, which it believes will ultimately be as pervasive as mobile phones.
WaveOptics, based in Oxford, makes the AR displays – known as waveguides – Snap uses in its fourth-generation AR glasses, called Spectacles, which it announced last week.
Snap chief executive Evan Spiegel told US television news network CNBC the company had worked with WaveOptics for “many years” to develop its waveguides.
“These are really sophisticated and complex components,” Spiegel said. “This really represents a long-term investment in the future of Spectacles.”
The new Spectacles are to be offered only to select makers of Snapchat filters, called Lenses, partly because the waveguide technology they use remains relatively expensive.
An earlier version of Snap Spectacles, which didn’t include an AR display, was offered directly for sale to the public but was discontinued in part due to the losses the hardware added to the company’s bottom line.
The latest iteration includes AR effects that are visible indoors or outdoors, but the bright AR display contributes to reducing the Spectacles’ battery life to only 30 minutes.
Founded in 2014, WaveOptics has raised a total of $65m to date, according to PitchBook. Its 125 staff are to report to Steen Strand, head of Snap’s hardware division.
Snap is paying for half of the acquisition price in stock immediately, and in two years’ time is to pay the other half in either cash or stock.
WaveOptics said it will continue to supply other companies with waveguides, but many Snap competitors are developing their own AR display technology.
Facebook has said it is also building custom waveguides for its AR spectacles, set to debut later this year.
Snap’s Spiegel has said he believes it will take a decade before AR glasses become compelling enough for mass adoption.