--News Direct--
By Meg Flippin, Benzinga
Vuzix Corp. (NASDAQ: VUZI), the maker of smart glasses and augmented reality (AR) products, just got more firepower to grow thanks to a multimillion-dollar investment from Quanta Computer Inc. (OTC: QUCCF), a global Fortune 500 company and original design manufacturer (ODM).
The two already collaborate to advance the smart glasses market and this three-tranche $20 million investment further validates that partnership. The investment by Quanta Computer also strengthens Vuzix’s balance sheet, enabling it to ramp up production of its waveguides and launch new smart glasses and related products.
Smart Glasses Getting Smarter
Vuzix makes a variety of smart glasses and AR products, including head-mounted smart personal displays and wearable computing devices that offer users a portable high-quality viewing experience. The company’s smart glasses and component technologies are the result of deep R&D and OEM partnerships with technology companies like Quanta Computer. Quanta Computer is a leading notebook manufacturer, cloud computing provider and maker of products for the IT, consumer electronics, cloud computing and smart technology markets such as smart homes. Last year it had revenue of $35 billion, and it has a workforce of about 62,000 employees located around the world.
Vuzix says its light, thin and ergonomic waveguide designs combined with its optics technology for display engines sets it apart from its rivals. Vuzix’s waveguides take a projected virtual image and relay it to the eye while expanding the exit pupil (viewing window) at the same time.
"Quanta’s investment today represents another important step in our partnership, which has steadily deepened since we first disclosed it last November," said Paul Travers, president and CEO of Vuzix. "This investment, and the ones to follow, will significantly strengthen our balance sheet and assure that we can implement whatever steps needed to ramp production of waveguides, as well as the co-development of new smart glasses and related technologies.”
Getting Cash In The Coffers
Under the terms of the deal, Quanta will invest $20 million in three tranches. The first tranche will consist of $10 million of Vuzix common stock. The second and third tranches, $5 million each, are tied to specific milestones and will consist of the purchase of Vuzix Series B Preferred Stock.
“We plan to work closely with Vuzix to support the AR smart glasses industry and today’s investment in Vuzix represents a strong endorsement of our partnership," said Frank Chuang, Vice President of Quanta Computer. Vuzix said at least $3 million from the investment will go for new product development. Quanta is paying $1.30 per share for the first $10 million of stock.
Market In Growth Mode
The investment comes at a time when the smart glasses market seems to be taking off and looks poised for growth. The global smart glasses market is forecast to reach $13.68 billion by 2031, growing at a CAGR of 10.3% from 2024 through 2031. Driving the market is demand from manufacturing, warehousing and healthcare companies that use smart glasses to train associates and to provide remote assistance. Monocular smart glasses, which are known to be light and compact, are expected to be a big driver of growth in industries where access to hands-free information is necessary. With these glasses, data and information are overlaid directly on the display.
The investment and collaboration should help Vuzik continue to innovate in the marketplace and grow sales. The company said as much when announcing the deepening partnership, saying it looks forward to “realizing the significant” revenue potential it stands to generate in the coming years thanks to the collaboration.
Smart glasses are taking off as the use cases continue to grow. Vuzik wants to be a leader and is forging partnerships to make that a reality. Its expanded deal with Quanta Computer underscores that. Not only does it give it $20 million in capital to innovate and expand its offering, but it also offers validation of its technology, given that a computer giant with more than $35 billion in sales has chosen to deepen their partnership.
To learn more about the deal and Vuzik, click here.
Featured photo courtesy of Vuzix.
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