augmented reality

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Another high-flying, heavily funded AR headset startup is shutting down

While Apple and Microsoft strain to sell augmented reality as the next major computing platform, many of the startups aiming to beat them to the punch are crashing and burning.

Daqri, which built enterprise-grade AR headsets, has shuttered its HQ, laid off many of its employees and is selling off assets ahead of a shutdown, former employees and sources close to the company tell TechCrunch.

In an email obtained by TechCrunch, the nearly 10-year-old company told its customers that it was pursuing an asset sale and was shutting down its cloud and smart-glasses hardware platforms by the end of September.

“I think the large majority of people who worked [at Daqri] are sad to see it closing down,” a former employee told TechCrunch. “[I] wish the end result was different.”

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The company’s 18,000+ square foot Los Angeles headquarters (above) is currently listed as “available” by real estate firm Newmark Knight Frank. The company’s Sunnyvale offices appear to have been shuttered sometime prior to 2019.

Daqri’s shutdown is only the latest among heavily funded augmented reality startups seeking to court enterprise customers.

Earlier this year, Osterhout Design Group unloaded its AR glasses patents after acquisition talks with Magic Leap, Facebook and others stalled. Meta, an AR headset startup that raised $73 million from VCs, including Tencent, also sold its assets earlier this year after the company ran out of cash.

Daqri faced substantial challenges from competing headset makers, including Magic Leap and Microsoft, which were backed by more expansive war chests and institutional partnerships. While the headset company struggled to compete for enterprise customers, Daqri benefited from investor excitement surrounding the broader space. That is, until the investment climate for AR startups cooled.

Daqri was, at one point, speaking with a large private-equity firm about financing ahead of a potential IPO, but as the technical realities facing other AR companies came to light, the firm backed out and the deal crumbled, we are told.

As of mid-2017, a Wall Street Journal report detailed that Daqri had raised $275 million in funding. You won’t find many details on the sources of that funding, other than references to Tarsadia Investments, a private-equity firm in Los Angeles that took part in the company’s sole disclosed funding round. We’re told Tarsadia had taken controlling ownership of the firm after subsequent investments.

In early 2016, Daqri acquired Two Trees Photonics, a small U.K. startup that was building holographic display technologies for automotive customers. The U.K. division soon comprised a substantial portion of the entire company’s revenues, sources tell us. By early 2018, the division was spun out from Daqri as a separate company called Envisics, leaving the Daqri team to focus wholly on bringing augmented reality to enterprise customers.

The remaining head-worn AR division failed to gain momentum after prolonged setbacks in adoption of its AR smart glasses, including difficulties in training workers to use the futuristic hardware, a source told TechCrunch.

All the while, the company’s leadership put on a brave face as the startup sputtered. In an interview this year with Cornell Enterprise Magazine, Daqri CEO Roy Ashok told the publication that the startup was forecasting shipments of “tens of thousands” of pairs of its AR glasses in 2020.

Daqri, its founder and several executives did not respond to requests for comment.

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Through crowdsourcing, Cerberus Interactive wants to take location-based gaming to the masses

Sami Khan began his work in the startup world by marketing mobile-based investment services like Acorns.

Now the marketer who helped grow that business to a nearly $1 billion valuation is turning his attention to location-based gaming in the hopes that he can take on leading contender Niantic with a faster, more flexible and fan-driven approach to game development with his new startup, Cerberus Interactive.

Khan’s pitch is that he’s taking the skills he honed building up services like Acorns or the browser extension for bargain hunters, Honey, to game development to make games more viral from their inception.

The biggest thing is how do you de-risk what is perceived as a hit-driven industry?,” Khan asks. “Games are closer to digital apps than back in the days of the console and companies should ship it like an e-commerce concept… If adoption of the game is going to be the decision factor of whether a game fails or succeeds… why isn’t the adoption of the game tested before the title is built or while the game is being conceived?”

So for his first foray into gaming, Khan is combining a crowdsourced approach to the development of the game and applying it to what many people think is gaming’s next big frontier — the location-based game phenomenon that hit its stride with Niantic’s Pokémon GO.

Right now in location-based games you have the behemoth which is Niantic,” says Khan. “Right now the gaming industry looks at location-based games as its own sub genre. But when we look at location-based games, we believe that location-based games have an aspect that it is a game mechanic within other games.” 

The first game that Cerberus is developing is a base-building simulator akin to a title like “Age of Empires,” but based on real-world locations. “Simulation games or casual games with location built in will have a bonus or an advantage over the stationary games that we play today,” says Khan.

The “Atlas Empires” title that Cerberus is currently developing is being made in concert with the gamers who might want to play it. So far, an undisclosed number of customers are already paying to have a say in certain aspects of the game’s development — kind of like a premier tier within a crowdfunding campaign.

Khan, a New Orleans native who splits his time between Los Angeles and Austin, has enlisted some marquee investors in his bid to challenge both the traditional ways in which games have been developed and the current industry leader.

Strategic investor MobilityWare has signed on to back the company along with individual investors like Steve Huffman, the co-founder and chief executive of Reddit, and Blake Chandler, the chief business officer of the runaway social network hit, TikTok.

Khan traces his love of games to his time visiting his cousins in Bangladesh and playing “Prince of Persia” on an early Toshiba laptop. “I remember sitting around the computer, watching my oldest cousin play because my dad didn’t want any of the kids touching the laptop,” Khan says.

So far the beta version of “Atlas Empires” has had 50,000 downloads and has about 1,000 daily players, Khan says. The commercial version of the game is expected to go live in the first quarter of 2020, says Khan.

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The Void’s Curtis Hickman on scaling, creative IP and the future of VR experiences

What can you do with virtual reality when you have complete control of the physical space around the player? How “real” can virtual reality become?

That’s the core concept behind The Void. They take over retail spaces in places like Downtown Disney and shopping malls around the country and turn them into virtual reality playgrounds, They’ve got VR experiences based on properties like Star Wars, Ghostbusters, and Wreck-It Ralph; while these big names tend to be the main attractions, they’re dabbling with creating their own original properties, too.

By building both the game environment and the real-world rooms in which players wander, The Void can make the physical and virtual align. If you see a bench in your VR headset, there’s a bench there in the real world for you to sit on; if you see a lever on the wall in front of you, you can reach out and physically pull it. Land on a lava planet and heat lamps warm your skin; screw up a puzzle, and you’ll feel a puff of mist letting you know to try something else.

At $30-$35 per person for what works out to be a roughly thirty-minute experience (about ten of which is watching a scene-setting video and getting your group into VR suits), it’s pretty pricey. But it’s also some of the most mind-bending VR I’ve ever seen.

The Void reportedly raised about $20 million earlier this year and is in the middle of a massive expansion. It’s more than doubling its number of locations, opening 25 new spots in a partnership with the Unibail-Rodamco-Westfield chain of malls.

I sat down to chat with The Void’s co-founder and Chief Creative Officer, Curtis Hickman, to hear how they got started, how his background (in stage magic!) comes into play here, how they came to work with massive properties like Ghostbusters and Star Wars, and where he thinks VR is going from here.

Greg Kumparak: Tell me a bit about yourself. How’d you get your start? How’d you get into making VR experiences?

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Polarity raises $8.1M for its AI software that constantly analyzes employee screens and highlights key info

Reference docs and spreadsheets seemingly make the world go ’round, but what if employees could just close those tabs for good without losing that knowledge?

One startup is taking on that complicated challenge. Predictably, the solution is quite complicated, as well, from a tech perspective, involving an AI solution that analyzes everything on your PC screen — all the time — and highlights text onscreen for which you could use a little bit more context. The team at Polarity wants its tech to help teams lower the knowledge barrier to getting stuff done and allow people to focus more on procedure and strategy than memorizing file numbers, IP addresses and jargon.

The Connecticut startup just closed an $8.1 million “AA” round led by TechOperators, with Shasta Ventures, Strategic Cyber Ventures, Gula Tech Adventures and Kaiser Permanente Ventures also participating in the round. The startup closed its $3.5 million Series A in early 2017.

Interestingly, the enterprise-centric startup pitches itself as an AR company, augmenting what’s happening on your laptop screen much like a pair of AR glasses could.

The startup’s computer vision software that uses character recognition to analyze what’s on a user’s screen can be helpful for enterprise teams importing things like a company Rolodex so that bios are always collectively a click away, but the real utility comes from team-wide flagging of things like suspicious IP addresses that will allow entire teams to learn about new threats and issues at the same time without having to constantly check in with their co-workers. The startup’s current product has a big focus on analysts and security teams.

Polarity before and after two

via Polarity

Using character recognition to analyze a screen for specific keywords is useful in itself, but that’s also largely a solved computer vision problem.

Polarity’s big advance has been getting these processes to occur consistently on-device without crushing a device’s CPU. CEO Paul Battista says that for the average customer, Polarity’s software generally eats up about 3-6% of their computer’s processing power, though it can spike much higher if the system is getting fed a ton of new information at once.

“We spent years building the tech to accomplish [efficiency], readjusting how people think of [object character recognition] and then doing it in real time,” Battista tells me. “The more data that you have onscreen, the more power you use. So it does use a significant percentage of the CPU.”

Why bother with all of this AI trickery and CPU efficiency when you could pull this functionality off in certain apps with an API? The whole deliverable here is that it doesn’t matter if you’re working in Chrome, or Excel or pulling up a scanned document, the software is analyzing what’s actually being rendered onscreen, not what the individual app is communicating.

When it comes to a piece of software analyzing everything on your screen at all times, there are certainly some privacy concerns, not only from the employee’s perspective but from a company’s security perspective.

Battista says the intent with this product isn’t to be some piece of corporate spyware, and that it won’t be something running in the background — it’s an app that users will launch. “If [companies] wanted to they could collect all of the data on everybody’s screens, but we don’t have any customers doing that. The software is built to have a user interface for users to interact with so if the user didn’t choose to subscribe or turn on a metric, then [the company] wouldn’t be able to force them to collect it in the current product.”

Battista says that teams at seven Fortune 100 companies are currently paying for Polarity, with many more in pilot programs. The team is currently around 20 people and with this latest fundraise, Battista wants to double the size of the team in the next 18 months as they look to scale to larger rollouts at major companies.

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Google launches ‘Live View’ AR walking directions for Google Maps

Google is launching a beta of its augmented reality walking directions feature for Google Maps, with a broader launch that will be available to all iOS and Android devices that have system-level support for AR. On iOS, that means ARKit-compatible devices, and on Android, that means any smartphones that support Google’s ARcore, so long as “Street View” is also available where you are.

Originally revealed earlier this year, Google Maps’ augmented reality feature has been available in an early alpha mode to both Google Pixel users and to Google Maps Local Guides, but starting today it’ll be rolling out to everyone (this might take a couple of weeks depending on when you actually get pushed the update). We took a look at some of the features available with the early version in March, and it sounds like the version today should be pretty similar, including the ability to just tap on any location nearby in Maps, tap the “Directions” button and then navigating to “Walking,” then tapping “Live View” which should appear near the bottom of the screen.Live ViewThe Live View feature isn’t designed with the idea that you’ll hold up your phone continually as you walk — instead, in provides quick, easy and super-useful orientation by showing you arrows and big, readable street markers overlaid on the real scene in front of you. That makes it much, much easier to orient yourself in unfamiliar settings, which is hugely beneficial when traveling in unfamiliar territory.

Google Maps is also getting a number of other upgrades, including a one-stop “Reservations” tab in Maps for all your stored flights, hotel stays and more — plus it’s backed up offline. This, and a new redesigned Timeline, which is airing on Android devices only for now, should also be rolling out to everyone over the next few weeks.

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The Note’s most impressive new feature is only available on the 10+

The new Note’s 3D scanning feature got what may well have been the loudest applause line of today’s big Samsung event. It’s an impressive feature for sure, but it’s the kind with little real-world value at the moment — and it’s only available on the pricier Note 10+. Understandable on the latter, at least.

After all, Samsung needs some ways to distinguish the more expensive unit. Aside from size and pricing, the 10+ also features a time of flight sensor missing on the standard Note. That brings an extra level of depth sensing. For now, uses for the feature are pretty limited. Take AR Doodle — that’s available on both versions of the device.

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3D scanning is an impressive differentiator, and the demo rightfully got some cheers as a Samsung employee walked a circle around a stuffed beaver toy named “Billy” (I dunno, man). The phone did a solid job capturing the image in 3D and pulled it out of its background. From there, a user can sync its movements to their own and animate it, AR/Animoji-style.

Again, a neat demo, but pretty limited real-world use for most of us. Though that’s pretty standard for these sorts of features. It’s as much about showing that the company is thinking about AR and offering the hardware to do it. Making it truly useful, however, will be in the hands of developers.

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Calling all hardware startups! Apply to Hardware Battlefield @ TC Shenzhen

Got hardware? Well then, listen up, because our search continues for boundary-pushing, early-stage hardware startups to join us in Shenzhen, China for an epic opportunity; launch your startup on a global stage and compete in Hardware Battlefield at TC Shenzhen on November 11-12.

Apply here to compete in TC Hardware Battlefield 2019. Why? It’s your chance to demo your product to the top investors and technologists in the world. Hardware Battlefield, cousin to Startup Battlefield, focuses exclusively on innovative hardware because, let’s face it, it’s the backbone of technology. From enterprise solutions to agtech advancements, medical devices to consumer product goods — hardware startups are in the international spotlight.

If you make the cut, you’ll compete against 15 of the world’s most innovative hardware makers for bragging rights, plenty of investor love, media exposure and $25,000 in equity-free cash. Just participating in a Battlefield can change the whole trajectory of your business in the best way possible.

We chose to bring our fifth Hardware Battlefield to Shenzhen because of its outstanding track record of supporting hardware startups. The city achieves this through a combination of accelerators, rapid prototyping and world-class manufacturing. What’s more, TC Hardware Battlefield 2019 takes place as part of the larger TechCrunch Shenzhen that runs November 9-12.

Creativity and innovation no know boundaries, and that’s why we’re opening this competition to any early-stage hardware startup from any country. While we’ve seen amazing hardware in previous Battlefields — like robotic armsfood testing devicesmalaria diagnostic tools, smart socks for diabetics and e-motorcycles, we can’t wait to see the next generation of hardware, so bring it on!

Meet the minimum requirements listed below, and we’ll consider your startup:

Here’s how Hardware Battlefield works. TechCrunch editors vet every qualified application and pick 15 startups to compete. Those startups receive six rigorous weeks of free coaching. Forget stage fright. You’ll be prepped and ready to step into the spotlight.

Teams have six minutes to pitch and demo their products, which is immediately followed by an in-depth Q&A with the judges. If you make it to the final round, you’ll repeat the process in front of a new set of judges.

The judges will name one outstanding startup the Hardware Battlefield champion. Hoist the Battlefield Cup, claim those bragging rights and the $25,000. This nerve-wracking thrill-ride takes place in front of a live audience, and we capture the entire event on video and post it to our global audience on TechCrunch.

Hardware Battlefield at TC Shenzhen takes place on November 11-12. Don’t hide your hardware or miss your chance to show us — and the entire tech world — your startup magic. Apply to compete in TC Hardware Battlefield 2019, and join us in Shenzhen!

Is your company interested in sponsoring or exhibiting at Hardware Battlefield at TC Shenzhen? Contact our sponsorship sales team by filling out this form.

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Unity, now valued at $6B, raising up to $525M

Unity’s private valuation is climbing but it’s growing unclear whether the company’s leadership is planning to take the 15-year-old gaming powerhouse public anytime soon.

The company announced today that is has received signed agreements from D1 Capital Partners, Canada Pension Plan Investment Board, Light Street Capital, Sequoia Capital, and Silver Lake Partners to fund a $525 million tender offer that will allow Unity’s common shareholders — the majority of which are early or current employees — to sell their shares in the company.

The tender offer gives employees “the opportunity for some liquidity,” Unity CFO Kim Jabal says. The total amount raised will depend on the enthusiasm of common shareholders to sell their stakes in Unity.

This event could potentially signify that the company is pushing back its timeline for an IPO, keeping employees that have been sitting on equity for several years happy as Unity labors on in private markets. It’s worth noting that the company has raised hundreds of million previously with the same intent of buying back employee shares.

It was reported earlier this year that Unity was targeting an IPO in the first half of 2020.

The company also confirmed that it wrapped up a $150M Series E funding round in May that doubled the company’s valuation to $6 billion. The announcement confirms the valuation we reported on in May though at a higher amount of capital raised.

SF-based Unity has more than 2,000 employees. The company builds developer tools which are used game studios to create video games across a number of platforms. The company claims that half of all games are created using the company’s game engine.

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A chat with Niantic CEO John Hanke on the launch of Harry Potter: Wizards Unite

Just shy of three years ago, Pokémon GO took over the world. Players filled the sidewalks, and crowds of trainers flooded parks and landmarks. Anywhere you looked, people were throwing Pokéballs and chasing Snorlax.

As the game grew, so did the company behind it. Niantic had started its life as an experimental “lab” within Google — an effort on Google’s part to keep the team’s founder, John Hanke, from parting ways to start his own thing. In the months surrounding GO’s launch, Niantic’s team shrank dramatically, spun out of Google, and then rapidly expanded… all while trying to keep GO’s servers from buckling under demand and to keep this massive influx of players happy. Want to know more about the company’s story so far? Check out the Niantic EC-1 on ExtraCrunch here.

Now Niantic is back with its next title, Harry Potter: Wizards Unite. Built in collaboration with WB Games, it’s a reimagining of Pokémon GO’s real-world, location-based gaming concept through the lens of JK Rowling’s Harry Potter universe.

I got a chance to catch up with John Hanke for a few minutes earlier this week — just ahead of the game’s US/UK launch this morning. We talked about how they prepared for this game’s launch, how it’s built upon a platform they’ve been developing across their other titles for years, and how Niantic’s partnership with WB Games works creatively and financially.

Greg Kumparak: Can you tell me a bit about how all this came to be?

John Hanke: Yeah, you know.. we did Ingress first, and we were thinking about other projects we could build. Pokémon was one that came up early, so we jumped on that — but the other one that was always there from the beginning, of the projects we wanted to do, was Harry Potter. I mean, it’s universally beloved. My kids love the books and movies, so it’s something I always wanted to do.

Like Pokémon, it was an IP we felt was a great fit for [augmented reality]. That line between the “muggle” world and the “magic” world was paper thin in the fiction, so imagining breaking through that fourth wall and experiencing that magic through AR seemed like a great way to use the technology to fulfill an awesome fan fantasy.

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Focals by North review: The future is (almost) here

The concept of an IRL heads-up display has been a part of science fiction since basically the beginning. Big players have tried their hand at it with less than stellar results — most notably Google with Glass, and more recently Intel’s Vaunt. But North may have cracked the nut on smart glasses with Focals.

They are not perfect by any stretch of the imagination — they’re slightly heavy and don’t feel quite as seamless as science fiction promised they would — but this may be the best pair of smart glasses yet.

Who

Focals were created by North, a Canadian company backed by Intel Capital, Spark Capital and the Amazon Alexa Fund with nearly $200 million in funding. Around the time Google Glass was released, founders Aaron Grant, Matthew Bailey and Stephen Lake were working on a smart arm band. They were disenchanted, as were many, with Glass and sought to make something better.

Their first priority? Make a great pair of glasses, then outfit them with technology. In order to do that, they had to allow for prescription lenses, which means the lenses of their product had to be curved. This throws a huge wrench in the idea of lens-projected notifications and content, so Focals created its own special projector.

The company also felt that the touchpad on the side of Google Glass was overly cumbersome, leading them to build the Focals Ring to let users navigate the menu.

What

The Focals are technically AR glasses, but they’re not focused on gaming or content consumption. The product is designed to move notifications from your phone to your sightline. It’s a bit like an Apple Watch for your face.

These notifications include the date and time, the weather, text notifications, email, Slack, Apple News alerts, Uber notifications, sports scores, turn-by-turn navigation and more. Users navigate this content using the Ring, outfitted with a nub of a joystick, which is meant to be worn on the index finger of your dominant hand.

Users can proactively seek information by clicking the joystick and scrolling, but the headset also serves up information in a push notification, including incoming messages and emails.

Importantly, North implemented a smart response system to keep users from having to pick up their phone each time they get a notification. The system gives users two options: choose from a list of smartly generated responses, or use speech-to-text through Focals’ built-in Alexa integration (the system is listening via built-in mic — but wearers have to opt-in during set up).

However, one of the great advantages for the Focals is also one of its weaknesses. The company chose to build a custom pair of glasses that could work with Rx lenses. That also means that the eyebox (the surface where you can see the projection) is smaller than other AR gadgets, which often use waveguides. In other words, your Focals have to be positioned pretty near perfectly to see the image. The company works hard to make sure that’s the case, fitting the glasses to your specific face. But glasses shift and move throughout the day, which means there’s plenty of re-adjusting in order to see the picture.

All that said, the Focals look surprisingly good. In fact, passersby would be hard-pressed to detect that they’re smart glasses in the first place. They aren’t comfortable enough to wear all day — the extra weight on the front means they get a bit uncomfortable after a few hours. But overall, these are pretty discreet as far as smart glasses go.

How

It’s a relatively time-consuming process to get your hands on a pair of Focals. Because the fit and size are so important to usability, users interested in purchasing a pair must go to one of North’s two stores (there’s one in Toronto, and one in Brooklyn, NY).

The visit to the store is by appointment. Upon arrival, store associates will take you into a booth where you’ll sit before 11 cameras that will 3D model your head, determining where your eyes and ears sit relative to the rest of your face. The cameras also try to understand your gaze.

From there, you get a demo with a standard (not fitted) pair of Focals, during which you learn how to align the Focals and use the Ring. It takes a few weeks for your custom-fit Focals to be ready to pick up, at which point you go through a final sizing with an optician.

It’s tedious, and will be difficult for the company to scale, but it’s part of what gives Focals an edge in quality. Luckily for folks outside of Toronto and NY, Focals is heading off on a pop-up tour. You can check out the tour dates and locations here.

Why

“Why?” is perhaps the toughest question to answer when it comes to the Focals. The goal, as outlined by the company, is to keep you connected to the digital world without taking you out of the real world. In short, stop looking down at your phone.

That said, Focals also take away the option. When your phone rings, or even when your Apple Watch buzzes, you have a choice to make: look down, or ignore. When you’re wearing the Focals, that decision is eliminated.

For this reason, I feel like this product is meant for early adopters and folks who enjoy being ultra-connected to the digital world. If you’re already addicted to the sweet chime of your phone, the Focals may very well keep you more connected to the real world, and potentially save your neck from some stiffness. But if you do well to live in the real world and don’t appreciate the constant flow of notifications to your phone, the Focals likely won’t help you maintain that separation.

There are also some minor issues with the Focals themselves. The Ring isn’t super comfortable, particularly when typing on a computer (something most of us spend hours each day doing). The Ring also seems like something that would be very easy to lose or break — this hasn’t happened to me yet, but I wouldn’t be surprised if it did. (For now, North is replacing broken Rings for free.)

With the Focals themselves, I’d like to be clear when I say that I was pleasantly surprised with the overall experience. The UI is pleasant to look at, and the little chime of a notification that whispers in your ear is most certainly addictive.

However, I found my eyes getting tired after more than an hour wearing the Focals. Using the Focals means that you’re constantly changing the focus of your eyes from close to far away, which can be tiring. Moreover, if the glasses shift a bit on your face, the text of the notification can become fuzzy, making the experience even more tiring.

Plus, the glasses are built to bend halfway through the arms, as opposed to where the arms meet the frames. This means you can’t hang the Focals off the front of your shirt, which is an admittedly minor gripe, but it bugged me throughout the review process.

Add to that the fact that Focals start at $600 and this product is really for technophiles. For now.

North is on the right track. The company is constantly developing new features that are released each week — they recently launched Google Fit support to check your steps, as well as language lessons to brush up on your French during your walk to work. And they’ve started with the right priorities in mind. The Focals are fine looking glasses, and in general, the tech works. Now it’s about refinement.

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