Snap is buying WaveOptics, a UK-based maker of optical systems for augmented-reality headsets, for more than $500m, as it deepens its push into the next generation of hardware.
The move comes after it pipped its larger rivals Facebook and Apple to become the first big technology company to unveil AR smart glasses.
WaveOptics was founded in 2014 by three former British Aerospace engineers, who had originally worked on the technology for fighter pilots’ helmets. The Oxfordshire-based company had raised $60m in venture-capital funding.
Half of the acquisition cost will be paid in stock at the deal’s closing, while the remainder will be paid in either cash or stock in two years, Snap said.
The deal, first reported by The Verge, comes a day after Evan Spiegel, Snap’s chief executive, announced that his company had built a pair of AR glasses, called Spectacles, that allow users to overlay filters on to the real world. Equipped with two tiny cameras and four microphones, as well as a display developed by WaveOptics, the lightweight headset also allows users to capture and share short clips of what they see.
AR glasses’ display, comprising a tiny light source and the lens on to which the image is projected, is perhaps their most important component, often accounting for between a third and half of a device’s total bill of materials. WaveOptics develops waveguides: tiny prisms that sit inside smart glasses’ frames that help to create holographic images seen by the wearer.
Rival makers of waveguide technology include Israel’s Lumus, New York-based Vuzix, California-based Digilens and Finland’s Dispelix. Facebook, Apple, Nokia, Sony and Google have also worked on waveguide technologies, according to patent filings and other disclosures.
Spiegel told the Financial Times this week that it had worked closely with its suppliers, such as WaveOptics, to optimise the optical system for Spectacles to be “really small and power efficient”, while also creating an image that is bright enough to see outside in daylight.
Martin Harriman, WaveOptics chair since 2016, has held senior executive roles at BT, Ericsson, AT&T, Telefónica and altnet Community Fibre.
WaveOptics had previously worked with several consumer electronics companies and device manufacturers such as Pegatron, Wistron and Compal. It is unclear whether those relationships will continue after Snap takes control of the company. The UK’s Competition and Markets Authority has been eager to scrutinise takeovers of small British tech companies by larger US companies in recent years. Snap said it would work with regulators to obtain any necessary approvals.
Facebook has said it plans to launch its first pair of “smart glasses” this year, albeit without a display for viewing AR effects; Apple is expected to launch its version next year at the earliest.
