Apps in the Metaverse often feel more like a marketing gimmick than something that critical consumers will actually use, let alone pay for. But take a look at the organization, and it looks like there’s a very lucrative opportunity, which is good for good demand. Today, one of the early movers in building solutions for that market is announcing funding to double the opportunity.
Varjo, which builds hardware and integrated software for industrial and other enterprise applications, has raised $40 million to use this Series D to both continue and dive into R&D for the headset. Software applications and tools for Varjo Reality Cloud, its own streaming platform that launched earlier this year.
It’s headquartered in Helsinki, Finland — founded and run by long-time veterans from Nokia, the once-leading smartphone and mobile maker that has fallen behind in the past decade — and its backers this round include several big investors. outside the region.
EQT Ventures, Atomico, strategic backer Volvo and Lifeline Ventures, new backers Mirabaud and Foxconn are also participating. Varjo describes the latter two as strategic: It’s unclear how the Swiss finance and banking giant will work with Varjo, but Foxconn is being tapped to help manufacture the equipment, CEO Timo Toikanen said in an interview.
Varjo isn’t disclosing a price, but data from PitchBook indicates that the last round in 2020 was $146 million and that Toikanen (who ran Nokia’s mobile phones before and after it was bought by Microsoft) was “very positive.”
In a hardware landscape dominated by big tech companies — especially in VR — Varjo is known as an independent player, and it’s not prone to attracting a lot of money to stay that way: it’s only raised about $150 million since its founding. 2016. Toikkanen declined to say whether others had approached him to buy Varjo, but given Nokia’s origins, I’m afraid he and the rest of the team will be the first to recognize the value of staying a small company. Creativity.
“We love what we do to this extent,” he said. “Freedom is a big advantage. We’re moving fast and have the ability to respond to customer needs.”
A number of players in the XR space are focused on consumer headsets and apps, and some argue that the quality of those efforts is variable: Mark Zuckerberg previewed the Horizon expansion, which Meta completely mocked. Others are working to improve the experience. And there are a number of companies that have invested in the B2B market (they include Meta Building Enterprise Applications, HP, and ByteDance-owned Pico), though even in that area, some like Spatial are moving into other “metaverses.”
Within that spectrum, Varjo was one of the early adopters of XR products that would be the first (and maybe the main?) enterprise customers, and it’s stuck with it. The focus is on producing premium, business-critical services and devices (and very sensitive to pricing), and the approach where virtual and augmented reality go hand-in-hand as mixed reality. Toikkanen believes priority is critical to his success.
Unusually, the Finnish clip said, “We’ve never been a hashpack company.” In the end, everything was done to build that way. We also said that the final incarnation should be as good as real life. A pixelated holographic will never look good.
The company currently produces three different headsets – XR-3, VR-3 and Aero, with prices ranging from $6,500 to $1,500, respectively, plus software subscriptions to use them (which start at around $1,500 per year), as well as for Reality Cloud and the next generation. A separate development environment called Teleport is still an alpha.
Currently, its focus is on applications in design and manufacturing, engineering, education and healthcare, and in addition to Volvo, its customers include Lockheed Martin, Boeing, Aston Martin, Kia – a total of 25% of the Fortune 100 company, according to the company – as well as “in the United States and Europe Different parts of governments.”
With acquisition Urho Kontori, another Nokia graduate, still on board as Varjo’s CTO, the startup also has a family of seven patents related to XR.
“Varjo is very intellectual property-protection oriented,” said Toikanen, adding that the company has been approached by other technology companies to license that IP, but has yet to develop that business. “Today, the focus is on building our own products and services. That’s how you gain access.”
