Alibaba Group invests $6m in Israeli AR startup Lumus

Augmented reality in medicine using a tablet. PIxabay

Israeli augmented reality (AR) lens maker Lumus has closed a $6 million venture investment from Chinese e-commerce major Alibaba Group.

Initially reported by the Israeli daily Calcalist, this latest investment follows a $30 million Series C in December 2016 from HTC and Quanta Computer. It raised $15 million in a Series B round in June 2016. This brings its aggregate equity financing raised to date to $57 million, according to date compiled by Crunchbase.

Founded by Yaakov Amitai in 2000, the company currently supplies lenses for the B2B AR market, producing optical engines. These are a crucial component of AR glasses and headsets and consists of a micro projector and an embedded waveguide. These are essential to the functionality of AR glasses; the projector sending the image to the lens, and the waveguide then directs it back to the eye.

While a minor investment for Alibaba, it fits into the Chinese giant’s longer term strategy of building up its capabilities in technologies that will impact e-commerce in the future. It also opens the possibility for deals with companies linked to the Alibaba corporate ecosystem, as well as the licensing and integration of Lumus products.

In a 2015 letter to its shareholders, executive chairman and Alibaba founder Jack Ma stated: “Many people confuse us with other e‑commerce retailers and therefore assess our business model solely on the basis of the growth rate of our gross merchandise volume (GMV). In fact, this narrow definition of e‑commerce is only a fraction of the Alibaba Group strategy. What we are building is an open, transparent and collaborative infrastructure for commerce.”

report by VR Room, which highlighted elements of Alibaba’s strategy, notes that Cainiao, Alibaba Group’s logistics affiliate, was testing an AR sorting system using the Microsoft Hololense AR headset; the solution navigates workers to walk in the fastest route to a package located on a designated shelf.

Also Read: China’s CreditEase launches second Israel-focussed fund, hits first close at $32.2m

China’s Kuang-Chi Group launches $250m fund targeting Israeli startups

Increasingly, e-businesses and other e-commerce players will be implementing sales & marketing strategies that integrate AR to boost sales and market share, given how it facilitates a more immersive customer experience.

Additionally, it allows businesses to build connections with customers through tying them into their platforms, product and service ecosystems. Through engaging peoples’ visual sense, AR can foster greater customer attachment and trust in products, leading to higher conversion rates.

However, given the array of devices that people will use, ranging from smartphones to smart watches and other personal computing devices, there will be a trend towards developing natural interaction methods that are optimised for AR devices.

A PWC report notes: “Although eye tracking doesn’t yet have the adoption of gesture tracking, it is a natural fit for the VR and AR market. Adoption of the technology likely will occur in VR headsets first, as VR is a more controlled environment without any issues related to ambient light or brightness.”

When accounting for Alibaba’s $150 million investment in e-sports through a strategic partnership with the International Esports Federation (IeSF) in 2016 and a closer look at its growth strategy, the investment ties in with a narrative of Alibaba seeking to develop offerings that connect business partners and consumers to its retail ecosystem.

Also Read:

China: Infinity Group, Neusoft to kick off $250m fund to grow Israeli medtech firms

China, India, Israel rival Silicon Valley as tech hot spots

Alibaba’s UCWeb to invest $30m in India and Indonesia in next 2 years

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.