snap acquires ar startup waveoptics, which provides tech for spectacles, for over $500m

Snap Acquires WaveOptics, the AR Technology Provider for its Spectacles

Yesterday, Snap unveiled the newest version of its Spectacles augmented reality glasses. Today, further news has emerged: the company is also acquiring WaveOptics, the startup responsible for key technology powering these glasses.

The parent company of Snapchat is acquiring WaveOptics, an AR startup specializing in the creation of waveguides and projectors utilized in AR glasses. These components are crucial for overlaying digital images onto the real-world view experienced by the wearer.

Deal Details and Financial Implications

The acquisition, initially reported by The Verge, has been directly confirmed by a Snap spokesperson to TechCrunch. Snap is investing over $500 million in the deal, structured as a combination of cash and stock.

The initial payment will be delivered in stock upon the deal's completion. The remaining amount will be disbursed in either cash or stock within a two-year timeframe.

WaveOptics' Background and Funding

This represents a significant advancement for WaveOptics, which had previously secured approximately $65 million in funding. Investors included Bosch, Octopus Ventures, and several individual contributors.

Notable individual investors were Stan Boland, a UK-based entrepreneur with experience at FiveAI, and Ambarish Mitra, co-founder of the AR startup Blippar. PitchBook estimates the startup’s recent valuation at around $105 million.

Continued Operations and Technological Significance

Founded in Oxford, WaveOptics is expected to maintain its presence in the UK. The company has been developing innovative waveguide technology based on holographic principles and photonic crystals.

A key benefit of WaveOptics’ technology is its ability to significantly reduce the size and weight of the hardware required for processing and displaying augmented reality images. This enables a broader range of designs for AR devices.

Future Collaboration and Snap's Strategic Acquisitions

It remains uncertain whether WaveOptics will continue collaborations with other companies following the acquisition. However, securing exclusive access to the technology would be a clear advantage for Snap.

Snap has been actively pursuing acquisitions in recent months, having completed at least three other startup purchases since January. These include Fit Analytics, for AR-enhanced e-commerce, and Pixel8Earth and StreetCred, for mapping capabilities.

A Landmark Acquisition for Snap

This deal signifies Snap’s largest acquisition to date based on valuation. This highlights the high value placed on fundamental artificial intelligence technologies.

Beyond the team of scientists at WaveOptics, the acquisition also brings with it 12 filed and pending patents. This demonstrates Snap’s strong commitment to being a leader in both AR-powered social applications and the development of AR hardware.

The company, consistently identifying itself as a “camera company,” views hardware as a vital component of its long-term strategy.

Deal Terms Disclosure

Snap’s 10-K SEC filing for the fiscal year ending December 31, 2021, included a disclosure of the specific deal terms.