8i, a company that develops holographic technology for virtual and augmented reality, has secured a $27 million Series B investment to support its new mixed reality app Holo in 2017.
Time Warner Investments led the round which saw participation from Baidu Ventures, Hearst Ventures, Verizon Ventures, One Ventures, Carsten Maschmeyer’s Seed & Speed Ventures, and other existing investors.
Bringing its total funding to $41 million, this marks Baidu’s first investment in the AR/VR space through its venture capital arm Baidu Ventures.
Baidu is the leading Chinese language Internet search provider. Baidu Ventures’ first fund is $200 million and is targeting investments in early-stage companies in the artificial intelligence (AI), AR and VR space. It maintains offices in Beijing and Sunnyvale, California.
The investment comes at a time when China-based investors are increasingly investing in AR and VR startups, according to data compiled by venture capital database CB Insights.
The investment will see Time Warner Investments Managing Director Scott Levine joins 8i’s board. The investment comes as 8i introduced Holo, a consumer mobile app that gives people an easy way to create mixed reality content with holograms of their favorite celebrities, brands, and characters.
The enterprise’s technology provides an easy way to record, create and experience human holograms that look real and feel as if they were in the same room. Through its 8i Studios partner program, 8i enables human-driven VR and AR projects from third party creators.
Daisy Cai, the managing partner at Baidu Ventures, commented: “We are excited to back the extraordinary team at 8i and help bring its superior holographic experience to mass audiences in China. At Baidu, we envision a future where VR and AR can be applied in numerous industries that serve our more than one billion monthly active users.”
The Baidu investment is significant, with Bloomberg noting that there at least 200 startups working in China’s VR industry that are aiming to capitalise on a domestic VR market expected to grow by 36 times in the next four years to 55 billion yuan ($8.5 billion).
In May 2016, video streaming service provider iQiyi, a subsidiary of Baidu, announced its intent to establish the world’s largest Chinese-language virtual reality (VR) content platform.
The move also comes at a time when Baidu is revising its business model and seeking to diversify its revenue streams, which currently relies on online advertising search revenues. Baidu uses a model similar to Google’s business model, with CKGSB Knowledge noting that it is currently searching to expand and diversify beyond its current business model.