CastAR announce US $15 million funding

The CastAR banner
The castAR website banner

CastAR, formerly Technical Illusions, the company behind the augmented reality castAR headset with a VR capability and which I’ve been covering in this blog, has announced the completion of a US $15 million round of funding.

Former Valve employees  Jeri Ellsworth and Rick Johnson founded the company in 2013 after being let go by Valve – and given the blessings of Gabe Newell, Valve’s founder and Managing Director, to take the IP used within castAR with them.

Since then, they’ve been developing the headset with the aim of producing a low-cost, self-contained AR system initially aimed at games and entertainment, but with a wide range of other potential applications – including VR, through the addition of a clip-on that allows for wide field-of-view VR experiences.

The Development Kit / Kickstarter version of the CastAR headset
The Development Kit / Kickstarter version of the castAR headset (image via Engadget)

The early stages of the company’s work was largely funded by a Kickstarter campaign in late 2013 which raised just over US $1 million. This provided sufficient capital to get the company running, albeit on the small scale, and in October 2014, they were able to start shipping the first of the Developer / Kickstarter backer kits whilst also relocating from Seattle, Washington, to Mountain View, California, a move overseen by the newly hired CEO, David Henkel-Wallace.

However, fulfilling the obligations of the Kickstarter campaign has been difficult – so far the company has only been able to produce and ship around 1/3 of the pledged headsets. The Series A round of funding, which has been chiefly backed by Playground Global, co-founded by Andy Rubin of Android Inc. fame, will enable the company to take on staff, complete its Kickstarter obligations and lay the foundations for the future.

The news of the investment round was announced to Kickstarter backers in a personal note from Jeri and Rick, which reaffirms their commitment to their original supporters, reading in part:

What does this mean for Kickstarter? Delivery! We remain committed, as we always have, to giving our Kickstarter backers a high quality product and experience. Of course with only nine people and an ambitious engineering plan, it clearly has taken us longer than we had planned, but among other things, this investment will make sure we complete the Kickstarter in the next several months.

We recognise every day that we would not be where we are at without the support of you, our backers. You believed in us when we put together a video showing a product of 90% hot glue, some friends using it, and some crude software. That support reassured us that we weren’t crazy, and it helped send investors the message that there is significant excitement for castAR.

The conceptualised castAR production headset and VR clip-on system (image: Technical Illusions)
The conceptualised castAR production headset and VR clip-on system (image: CastAR)

The slightly ungainly – at least in its development form – headset uses projectors mounted on it to bounce light of a retro-reflective surface in an effect Ellsworth came across by accident, setting her with the initial idea for the system. The light from the projectors is delivered back to the wearer’s eyes through active-shutter glasses which also track the user’s position, allowing the projection to be updated in real-time.

Projections seen when wearing the headset appear as holographic elements directly in front of the user’s field of vision, which can then be manipulated via a “wand” hand controller.  Because the retro-reflective material bounces light back to its origin, multiple users can use the same surface simultaneously without experiencing any interference from other headset, allowing multiple headsets to be used in the same physical space for game play or other activities.

A key aim of the headset is to be affordable, ease-to-use system which users of all ages can immediate grasp conceptually and use with ease.

“When we say a consumer product, we mean a consumer price point,”  Henkel-Wallce told when discussing the funding announcement. “The Oculus headset is only a few hundred dollars but then you need a $1000 PC to run your games. That’s not a consumer product, that’s not something you’re giving to your kids.

Making CastAR fun, affordable and self-contained is key to the unit's success
Daivd Henkel-Wallace: Making CastAR fun, affordable and self-contained seen as key to the unit’s success

“Our vision is that Christmas day Grandma has bought these for the kids, they tear open the paper, they open the box, they’re eight and ten years old, they put down the game board and within a minute they’re playing. That’s where we want to get to.”

It was this approach which attracted Playground Global’s interest, with Rubin stating, “I was really intrigued by [their] approach to tackling the problem of how to drive mainstream adoption of AR. They’re the only company I found to be simplifying the utility and application of augmented and virtual reality technology into a fun, accessible, and portable system that will wow kids and adults alike.”

The company’s change in name was also announced alongside of the funding news, and is seen as a natural step for the fledgling company, as Rick Johnson explained when writing to Kickstarter backers:

One observation we’ve made along the way is that people kept calling us “castAR” as a company name. We used the financing as an excuse to change our official company name to castAR.

The Series a funding round comes on top of an undisclosed seed round of funding for the company. Together these demonstrate that castAR is a viable investment concern, opening the door to additional round of investment in the future, if / when needed. As Henkel-Wallace informed, “This money really marks an inflection point from being just a raw start-up to actually allowing us to become a really fully functioning company.”

Congrats to Jeri, Rick, David and the team.