Xreal Inc., the Chinese maker of augmented reality glasses, today announced it has raised $60 million in a confidential strategic funding round to expand its consumer line of wearable AR devices.

The company said that it would use the new funding to scale up its manufacturing capabilities, research and development aimed at bringing affordable AR glasses to consumers.

Xreal makes AR devices, which is a technology that overlays computer holographic digital content with what wearers can see through the transparent lenses of glasses and allows them to interact with it. By doing this, AR glasses can allow computer-generated characters to appear to stand on the ground or hover in the air, and developers can create interactive user interfaces.

Xreal Chief Executive Officer Chi Xu told Bloomberg that the company currently has the ability to produce between 500,000 and 1 million units this year. The funding would allow the company to scale up to 2 million next year.

This announcement comes after Xreal unveiled its next-generation Air 2 Ultra AR glasses ahead of CES 2024 earlier this month. They feature 3D sensors and enhanced capabilities for mapping virtual objects.

The new Air 2 Ultra glasses represent a step forward for the company’s technology with a sleeker form factor and more powerful features that provide a 52-degree field of view horizontally. Wearers of the glasses could play video games and watch movies on virtual screens that would appear as large as 154 inches at a distance of 13 feet away.

“2023 was a very good year, and the market size pretty much doubled,” Xu said. During the third quarter of 2023 Xreal shipped 350,000 AR glasses, the company said, and the International Data Corporation noted that the company had held 51% of the global market share for augmented reality. “There’s a good chance we can do 50,000 units of Ultra this year,” Xu added.

The Air 2 Ultra is currently available for pre-order for $699, with shipments expected to start in March. With the release of the Ultra, Xu said, he expects it will take the market even in the face of competing virtual reality and extended reality headsets that completely enclose a wearer’s face, such as Apple Inc.’s Vision Pro and Meta Platform Inc.’s Quest 3. As a result, those can be less comfortable to wear for long periods of time.

“Unlike competing brands in this emerging space, we believe in making advanced wearable six-degrees-of-freedom glasses something you can wear all day long and that is accessible to all players in the [extended reality] development ecosystem,” Xu said.

Image: Xreal