WaveOptics, a UK startup that builds waveguide-based optics — technology based on hologram physics and photonic crystals — for augmented reality hardware, has raised $16 million (£12 million) to help build the next phase of its business.

The Series B round of funding — which comes from previous investors Octopus Ventures, Touchstone Innovations plc and Robert Bosch Venture Capital GmbH; along with new investor Gobi Ventures (the prolific VC firm out of China that also manages one of Alibaba’s entrepreneur funds) — is one of biggest of the year for AR startups out of Europe, and comes on the heels of significant business wins for WaveOptics.

Sumanta Talukdar, who co-founded the company with David Grey, confirmed to me in an interview that WaveOptics is working with some significant, large tech companies on AR hardware, beyond products with its strategic investor, Bosch. (For the record, he laughed but also declined to comment when I straight-out asked if those companies included Apple and Google.) The first products, he added, are likely to hit the market next year and are aimed at both the consumer and enterprise markets.

He also declined to give me a valuation for his company. Notably, when I saw WaveOptics pitch at a London event last year (at Pitch@Palace), the company touted its significantly more modest budget when compared to some others in the AR field: and in fact prior to this Series B it had just raised only around $400,000.

Magic Leap, as one comparison, has raised $1.4 billion; and enterprise-focused Daqri has disclosed $15 million in funding, but we and others have heard through the grapevine that it’s secretly been raising significantly more and is now valued at $1 billion. Both are building hardware, so that is one reason for the higher numbers overall.

Indeed, we’ve seen a number of AR firms come to market building vertically-integrated solutions covering both the software and hardware stacks, as well as software and apps that create experiences based on the basics of AR as currently works in existing hardware (such as Blippar, which also happens also be an investor in WaveOptics). What WaveOptics focuses on is something in between these two.

The company is building optics technology that can be used across different hardware, which it believes could change the rulebooks for where AR can be used, and how it can be used.

Up to now, while there have been some very powerful AR optics, they fall on their form factor: the resulting devices are just too big. Those that are small compromise on performance, by not giving users the abilty for immersive experiences.

And up to now, hardware that has achieved both of these qualities in one device — ideal size and performance — has turned out to be too expensive to make. “Being able to address all those things — performance, form factor and scalability — is what sets us apart,” Talukdar said.

“AR optics with great user experience and affordable cost in the mass production is the key for market adoption of AR products,” said Hongquan Jiang, Partner at Robert Bosch Venture Capital GmbH, in a statement. “WaveOptics‘ wave guides could become a game changer in this respect for the AR industry. We are very excited about the company and expect much synergy between WaveOptics and Bosch in a variety of AR applications.”

A demo video on the company’s website — whose URL is “enhancedworld.com” — gives you an idea of what WaveOptics is working on. The video takes the user through a quick journey with a cyclist who is able to check his bike’s diagnostics, get on the bike, navigate the roads, monitor his vitals, and track a virtual “race route” along the way — the idea here is that the system is capable of very fast, real-time processing of images and delivering back data to a user in an active, fast-moving environment.

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