The concept of an augmented reality heads-up display didn’t quite catch on with consumers when Google Glass debuted six years ago. But if RealWear’s growth is any indication, it has clearly found a use case in the industrial world.
The Vancouver, Wash.-based company today announced a whopping $80 million Series B equity and debt round led by Teradyne, a publicly-traded supplier of automatic test equipment. This is Teradyne’s first investment in a private company. The venture capital arms of Qualcomm and Bose also participated, along with Kopin Corporation and JP Morgan Chase.
RealWear sells ruggedized head-mounted voice-controlled AR devices that project a virtual Android tablet just below line of sight. Industrial workers use the product to do remote video calling, document navigation, guided workflow, mobile forms, and data visualization, among other tasks.
The company has shipped 15,000 units to more than 1,300 customers globally in the past 18 months. Earlier this year it inked a deal with China’s State Grid, the largest utility in the world. Other customers include Airbus, Shell, Colgate-Palmolive, Walmart, Volkswagen, Lexus, and more. BMW announced last month that it would use RealWear’s headset at more than 300 dealerships in North America.
The Series B round the third-largest for a Washington state startup this year, according to GeekWire’s fundings list, with only Auth0 and Outreach raising more cash.
RealWear posted $12 million in revenue last year, up from $2 million in 2017, with more growth expected as clients move from pilots to full deployments of the company’s device.
“Next year could be 9-figure year,” RealWear CEO Andy Lowery told GeekWire. “We are taking hold.”
RealWear builds the hardware and basic software that runs on the HMT-1 and HMT-1Z1. Lowery likened the company to Apple’s smartphone business because it also operates a platform allowing third-party developers to build the 120 apps that run on the headsets.
Microsoft is a RealWear partner on the software side, but it also competes with its own industrial augmented reality product, the HoloLens, which is used by organizations such as Airbus and the U.S. Army.
RealWear’s devices differ slightly as they are less immersive — on par with something like the Google Glass Enterprise Edition. Both Microsoft and Google have turned their augmented reality hardware efforts to the enterprise space as the technology has yet to catch on with mainstream consumers.
“The augmented reality enterprise market has experienced a great deal of hype, but long-term, real-world solutions have been thin on the ground,” Tom
Mainelli, IDC Group VP of Devices and AR/VR, said in a RealWear press release. “RealWear smartly recognized the need for a no-nonsense head-mounted display, and has delivered no-frills products that help frontline workers to get their jobs done more safely and efficiently.”
Funding in U.S.-based construction technology startups rose to nearly $3.1 billion last year, up from $731 million in 2017, according to TechCrunch.
Lowery said the company expects to be profitable later this year. The CEO and former U.S. Navy nuke officer previously ran an augmented reality startup called DAQRI that closed in 2016.
“Often the technology is confused with the problems we are trying to solve,” Lowery said in Geek of the Week profile last year. “People ask, ‘what business are you in? Augmented reality? Wearable computing? Voice recognition?’ We are doing all of that today. RealWear is in the business of connected knowledge. We are doing our part to balance what is best in people and machine, to accelerate global efficiency and bring greater global balance. Today that is with voice, wearables and augmented reality.”
Total funding to date in the 110-person company is north of $100 million. Previous backers include Columbia Ventures (which led a $17 million Series A round in February 2018), Mentors Fund, Realmax Technology, and Plug and Play Tech Center. RealWear is ranked No. 82 on the GeekWire 200, our index of Pacific Northwest startups.
“RealWear has experienced strong growth and is well positioned to become a leading platform for connected workers everywhere,” said Richard Tapalaga, a Qualcomm director and investment director with Qualcomm Ventures. Qualcomm partners with RealWear to provide its Snapdragon tech in the devices. “We are excited to invest in RealWear as we believe its unique platform will help drive value to the entire IoT ecosystem,” Tapalaga said.