Snap Acquires British AR Display Maker WaveOptics

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.

‘Long-term investment’

“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.

Mainstream adoption

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.

Google, which trialled Glass AR spectacles in the 2010s, has recently posted job listings for waveguide engineers, while Apple acquired waveguide developer Akonia in 2018.

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.