Viewpoints: January 2021 wrap-up

February 08, 2021

After a short break, this newsletter is returning. It is a digest of news, viewpoints and investment activity covering XR and the broader landscape of spatial computing. Through an investor lens, Petri & I compile and analyse the most important developments and financings from the previous month and send them directly to your inbox. This means you can stay up to date in this important and growing sector, without needing to read all the detail. We'll be experimenting with the format, so please do send us feedback on what you'd like to see.

Keep on reading and we hope you're already having a great 2021!

Dave Haynes & Petri Rajahalme

Introducing the new Viewpoints podcast

Alongside this newsletter, we've also started a virtual podcast all about the founders, builders and investors who are behind the category defining companies in the world of XR and spatial computing. We'll be talking to some great guests and trying out several platforms along the way.

So far we've been in Rec Room, Engage and Clubhouse, speaking with guests including Shawn Whiting (Rec Room), Tipatat Chennavasin (The Venture Reality Fund), Dr Doom (LIV), Spike Laurie (Hiro Capital) and Charlie Fink (Forbes).

Make sure to check out the recorded episodes here. And you can jump into Clubhouse here to join the conversation.

Viewpoints #1 - Virtual Social

Everyone's talking about the metaverse

2020 ended with a flurry of interesting talks and essays about the Metaverse; a persistent, infinitely-scaling virtual space with its own economy and identity system. In a great article on the a16z blog, partner Jonathan Lai acknowledges that there are many competing visions for how we’ll build the Metaverse, but argues that user-generated content and AI will be the two fundamental building blocks in constructing this galaxy of interconnected virtual worlds.

UGC is certainly part of Roblox's vision. Shortly after acquiring avatar-startup Loom.ai, the company went on to announce a huge $520m fundraise, valuing the company at $29.5bn. We may need to wait a little bit longer though for its planned direct listing. In the meantime, CEO Dave Baszucki wrote a great Wired piece telling us the Metaverse is Coming and he has been busy talking up his vision for a user-generated metaverse at a recent GamesBeat conference dedicated to the topic. From the same event, it's worth checking out Epic's Tim Sweeney arguing that the most important aspect of any future metaverse is that it should be as open as possible.

Through UGC and AI, we’re inching closer to the Metaverse. But the most exciting part of that vision is its potential to reinvent our social interactions.

New year, new hardware

With CES kicking off the year it was inevitable that we'd see a lot of talk about new hardware in January. SkarredGhost has a comprehensive CES roundup, which included new HMD's, AR glasses and even immersive car windscreens from the likes of Panasonic, Lenovo, Vuzix, CREAL, Rokid and Mercedes. One non-hardware news item from CES that caught our eye was Google launching its AR cloud streaming solution.

The Apple rumour mill has also been busy once again. As well as the likely expansion of the iPhone 12 Pro's LiDAR functionality to its entire iPhone 13 range, there is much speculation about Apple's plans for a future VR/AR headset. Bloomberg asserts that we'll most likely see a premium Apple VR headset in 2022, as a bridge towards AR smart glasses in 2023. A report this week corroborates and expands upon this citing a $3k price point and two 8k screens. We're skeptical of these exact details, but it does back up our current assumption of substantial moves into the headworn XR category by late-mover Apple, as early as next year.

Meanwhile, after estimates from SuperData that Facebook's Quest 2 sold 1m units in Q4 2020 (outselling the Quest 1 in just 7 weeks), and there's already rumours of the Quest 3. On top of that, Bloomberg believes we'll see the first smart glasses from Facebook 'sooner than later' and as early as this year.

Ultimately the important thing here from an investor's perspective is that all this means an expanding ecosystem of addressable headsets/platforms (including Vive, PSVR etc) and more revenue/users for startups and develoeprs targeting VR. On a recent earnings call Zuckerberg stated that more than 60 Oculus developers are generating revenue in the millions – that’s nearly twice as many as a few months ago.

A reliable report claims Apple's 2022 headset has dual 8K displays & foveated rendering - but at a premium price.

Fundraising round-up

Physna have raised $20m from Sequoia to become the 'GitHub for the 3D world' and build out its geometric deep-learning and 3D search technology. Check out its consumer platform, Thangs.

Marxent have raised $15m to expand its enterprise 3D home design platform.

PrecisionOS have raised an undisclosed amount for its medical-grade surgical simulations in AR/VR.

Aglet have raised $4.5m to make a social AR game for sneaker-heads (or a 'metaverse for commerce'). Notable angels included Matt Miesnieks (6D.ai, Niantic), Nate Mitchell (co-founder Oculus) and Greg Castle (Anorak).

Gowalla have raised $4m from GV and Spark Capital to build the next big thing in social AR.

ForeVR have raised $1.5m, led by Galaxy Interactive, to capitalize on the growing market for VR casual gaming. The company is founded by ex-Zynga veterans.

Trigo have raised $60m, led by 83North, for its computer vision driven cashierless shopping platform.

Finesse have raised $4.5m to predict fashion trends with AI.

Omnivor have raised $2.7m from Nike, T-Mobile & others as pandemic spurs interest in holographic media.

LetinAR have raised an undisclosed amount from Global Brains to continue developing its optical solutions for smart/AR glasses.

Holocap have raised to continue building out their holographic streaming and 3D-conferencing platform.

Physna have raised $20m from Sequoia to become the 'GitHub for the 3D world' and build out its geometric deep-learning and 3D search technology

Acquisitions

Snap has acquired Ariel AI for an undisclosed amount. The acquisition is a boost to Snap's AR ambitions. The UK-based computer vision startup had raised £1.1m, and the team included former Google and Facebook research scientists. This comes hot on the heels of Snap's acquisition of location data startup StreetCred, to improve their geo-specific augmented reality lenses that interact with physical locations.

Teledyne, the industrial sensing giant, has acquired FLIR for $8bn in cash and stock. FLIR’s technology extends their sensing offering and includes add-on thermal cameras designed for mobile devices, including the iPhone.

Shutterstock has acquired Turbosquid for $75m, which is strong recognition that 3D models are increasingly important for the company and their large customer base.

Cox Automotive has acquired Fyusion, a computer vision company and leader in immersive vehicle imaging solutions for automotive and other industries.

Xerox has acquired CareAR. The company's offering includes desktop and mobile software as well as smart glass devices.

Quick Links

Before we sign off for this month, here's a few extra data points and opinion pieces we thought were worth a read.

Reviewing the 20 trends being watched for 2020 to find see how they actually played out.

That's all for now, have a great February and please do send us your feedback,