Xreal, the Chinese AR glasses manufacturer, has procured $60 million in funding, pushing its valuation beyond $1 billion. This move positions Xreal to challenge industry leaders such as Apple Inc. AAPL, Meta Platforms Inc. META, and Alphabet Inc.'s GOOG GOOGL Google.
What Happened: Xreal’s latest funding round has taken its total funding to over $300 million. The additional capital is sourced from a key supply chain partner who wishes to remain anonymous, stated Xreal CEO Chi Xu, reported Bloomberg.
Chi further elaborated that the fresh capital will be used to augment the company’s manufacturing capabilities and support research and development. While the existing production capacity is sufficient for 2024, the new funds are required to meet the demand for the following year.
With an IPO planned within the next two years, Xreal anticipates revenues between $200 million and $300 million by 2025. Currently, the Beijing-based company employs around 600 people.
Despite stiff competition from pricier technology by Magic Leap Inc. and Microsoft Corp. MSFT which sells HoloLens, Xreal’s AR glasses, Air, have managed to capture a considerable market share, said Chi.
Xreal has no intentions of entering the virtual reality space, a more immersive technology leveraged by Apple in Vision Pro. However, Chi is confident that his company will be a competitor to Apple in the coming years despite not venturing into virtual reality.
“I think we’re three to five years ahead of them in AR”, Chi stated, adding, "They are catching up, though. So we need to keep up and push the boundary."
Why It Matters: According to research firm IDC, Xreal captured approximately 50% of the market for AR-exclusive devices in the third quarter of the last year.
Meta holds the top position in the broader mixed reality market, encompassing both virtual reality and AR, trailed by Sony Group Corp. and ByteDance Ltd. At the same time, the report noted that Xreal commands around 4% of the overall market.
The AR glasses market has witnessed several key developments in recent years. Last year, Meta unveiled its Ray-Ban Meta Smart Glasses, which integrated state-of-the-art AI for hands-free interaction.
However, the smart glasses landscape has also seen a blend of hits and misses, as highlighted by the comparison of Amazon’s Echo Frames and Meta’s Ray-Ban.
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Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.
Image Credits – Xreal.com
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