Chinese AR Glasses Manufacturer Secures $60 Million Funding to Challenge Apple, Meta, and Google
Xreal, the manufacturer of augmented reality glasses, is seeking new funding with a valuation exceeding $1 billion, as stated by CEO Chi Xu. The objective is to stay ahead of upcoming devices from Apple Inc., Meta Platforms Inc., and Google, as per Xu.
The Chinese startup will raise $60 million in the round, bringing its total to over $300 million, Chi said in an interview. That latest money comes from a key supply chain partner he declined to identify.
“This will help us scale our production capacity and research and development,” he said, adding that the company has enough capacity to meet glass demand this year but needs money to fulfill orders in 2025.
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Xreal aims to lead the way in augmented reality – a technology that overlays information and images on top of actual views. According to the research company IDC, the company’s share was about half of the market for AR devices in the third quarter of last year. In the larger combined virtual reality and AR market — known as mix reality — Meta is the leader, followed by Sony Group Corp. and ByteDance Ltd. Xreal has about 4% of the total market.
Chi said his company will be able to produce 500,000 to 1 million units this year. The investment should enable the production of 2 million devices next year. According to Chi, the company expects to generate $100 million to $150 million in revenue this year and $200 million to $300 million in 2025. Chi says he said he wants Xreal to go public in the U.S. within two years.
The seven-year-old company now has around 600 employees and is based in Beijing. The company’s Air glasses display notifications, games and video in the user’s field of vision. Chi said Xreal’s products have been gaining ground with more expensive technology from Magic Leap Inc. and Microsoft Corp., which sells the HoloLens headset.
“2023 was a very good year, and the market size doubled,” Chi said. The company, which said it gets most of its sales from Amazon.com Inc.’s website, offers AR glasses for just a few hundred dollars. But it believes its newest pair — the Air 2 Ultra — is what will drive future revenue.
“There’s a good chance we can do 50,000 Ultras this year,” Chi said, adding that the cheaper models are “definitely easier to sell” and that mass consumers aren’t looking for as many bells and whistles as they could get. competing products.
Xreal has no plans to enter virtual reality — the more immersive technology used in Apple’s new Vision Pro — but Chi believes his company will compete with the iPhone maker in the coming years.
“I think we’re three to five years ahead of them in AR,” Chi said. “However, they are catching up. So we have to keep up and cross the line.”
While developing the Vision Pro, Apple also worked on lightweight AR glasses similar to what Xreal offers. Bloomberg News reported last year that the company halted work on the device because it didn’t believe the technology was ready yet. Meta and Google have said they are planning their own consumer AR glasses to be released in the coming years.
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