(Bloomberg) — Chinese augmented reality headset maker Nreal raised $40 million in a fundraising round led by Tencent Holdings Ltd.-backed video startup Kuaishou, bankrolling its expansion into the nascent field of projecting digital objects onto the real world.
The so-called Series B1 funding round drew other investors including Sequoia China, Hillhouse Capital and CICC Capital, Nreal said in a statement, adding it’s raised $70 million to date.
Silicon Valley giants including Facebook Inc., Microsoft Corp. and Alphabet Inc.’s Google are also developing products for virtual or augmented reality, but it remains to be seen if the area will evolve into a big money-spinner.
Beijing-based Nreal was founded in 2017 by Xu Chi, a former engineer with American AR startup Magic Leap. Last year, Magic Leap filed a lawsuit against Xu, accusing him of stealing the company’s secrets, but a U.S. judge later ruled in Nreal’s favor and the case was dropped.
Magic Leap filed its lawsuit in 2019 amid growing tension between the U.S. and China over complaints by American firms of intellectual property theft by Chinese companies. It had been one of the most highly touted startups of Silicon Valley, raising more than $2 billion from investors including Alphabet. But sales never took off after extensive delays. The company laid off roughly half its workforce this year and brought in Microsoft’s Peggy Johnson as its new chief executive officer last month.
Read more: Augmented Reality Startup Magic Leap Taps Microsoft Alum
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