How WaveOptics became one of the biggest ever exits for a venture-backed “deeptech” start-up in Europe

WaveOptics is an Oxfordshire-based company that designs and develops optical engines for augmented reality smartglasses and headsets. Its display technology allows virtual objects to be overlaid onto the real world through a transparent surface like glass. The augmented reality company was sold to Snap in 2021 and its technology is a key component in Snap’s ‘Spectacles’ product.

The story began in 2015 when the team was approached by the WaveOptics founders who presented a cutting-edge augmented reality technology. Their new lens, which at the time was still tethered to a computer and mounted on a pole that you held up to your face to look through it, showed some very clear (albeit rudimentary) digital images overlayed onto the real world. This was done using a unique and novel approach of patterning microstructures onto the surface of the lens to efficiently redirect light into the eye.

As technologists ourselves, we saw huge potential in that early prototype, could see there was a large market for it and so we invested an initial £1.5m. As is often the case, our technical expertise gave us the confidence to take measured risk and allowed us to invest confidently at a far earlier stage than the large majority of the market.

Our team were instrumental in hiring both a new Chair and a new CEO, approaching a successful augmented reality entrepreneur to become CEO. He was equivocal about the job offer at first until he gazed through one of the new lenses for the first time, whereupon he placed it carefully back on its stand, looked up in disbelief, and said “OK, I’ll take the job!”.

The team also placed a CFO in the business and, alongside our own capital (we invested a total of £7.6m over 6 years), we introduced external funding from Australian superannuation fund Hostplus at a crucial moment.

WaveOptics went on to develop and manufacture lightweight, compact, and high-performance waveguide displays for Augmented Reality (AR) devices, selling them to manufacturers of AR glasses. WaveOptics counted 8 of the world’s top 10 social media and consumer electronics companies amongst its early customers including eventual acquirer Snap which now use the WaveOptics technology in its Spectacles product, an augmented reality device initially available to “creators” building immersive AR experiences.