How backing the transformation in human / machine interactions is paying off .

When you think of IP Group’s successes, WaveOptics, an augmented reality display company that we backed eight years ago, might not immediately spring to mind.  But it should. Why? Firstly, the sale of WaveOptics to Snap Inc for more than $500m in May 2021 was one of the biggest ever exits for a venture-backed “deeptech” start-up in Europe.

Second, the final tranche of exit proceeds (£31m) received this year were the main contributor to cash inflows in the period that have maintained IP Group’s strong balance sheet highlighted in our recent half-year results announcement. Third, having invested £7.6m into the business over 6 years, the returns we’ve seen have been very strong, with £60.3m in cash proceeds giving a 7.9x money multiple and an IRR of 54.3%.

And fourth, the story is typical of the unique way we work with founders and companies to deliver value for all stakeholders that sets us apart. Being technologists ourselves, we apply our expertise to get comfortable with investing at an early stage of technological development, which in the case of WaveOptics enabled us to access the potential of augmented reality very early on. Our team’s backgrounds and experience allow us to take a greater degree of technology risk than many investors are comfortable with, giving us the edge in backing the next generation of game-changing companies before they hit their value inflexion point, which helps to maximise our returns. Read the case study here.

The changing nature of the human-machine interface, which is becoming ever more akin to human-to-human interactions, has long been, and remains, a focus area for IP Group’s Deeptech investment team and underpins other portfolio investments such as Ultraleap (real-time hand tracking), AudioScenic (fully immersive and personalised audio) and SLAMcore (unbridled spatial awareness).

The field of AR is still in its relative infancy and we have seen several false starts, notably the Google Glass device that delivered only rudimentary images in a small viewing area. Yet we believe the sector is now reaching a point at which hardware capabilities can begin to support the true promise and vision of spatial computing.

Technology has progressed, but most of us still use a piece of plastic with two buttons for most of our computer commands even though neither a mouse nor a touchpad offers true interactivity with the massive computational power or the vast volumes of data which are now part of every aspect of our daily lives. Greater interactivity and accessibility will benefit our collective futures and is on the cusp of being realised.

But this new world will not just be a playground providing fun and entertainment, it will also be a classroom and a workplace. Being immersed in data, whether that be through AR, VR or other visual formats and projections, will lead to greater insights into what is being displayed and represented. Coupled with this will be a greater ability to interrogate, manipulate and interact with data creating new ways to understand, shape and mould the world around us, from better engineering designs to deeper insights into patterns and trends.

The announcement earlier this year of the Apple Vision Pro device marked a landmark in the journey towards a world of three-dimensional, immersive experiences that Apple CEO Tim Cook says will “change the way we use technology forever”.

The deeptech team at IP Group couldn’t agree more with this sentiment and see plenty of scope for further innovation. As we continue to back our investments in this field, we look forward to supporting more pioneering companies to follow in the footsteps of WaveOptics.