Eugene Sysoev and Andrew Kolodyuk’s Venture fund invested up to $1 mln into a company called Augmented Pixels(ex-AR23D Studio).
Vitaliy Goncharuk, CEO, AR23D Studio
Today Venture Fund AVentures Capital announced the acquisition of a share of the Odessa startup, Augmented Pixels formerly known as AR23D Studio. “The fund has paid up to $ 1 million for 25% of the company”, said one of the participants of the deal. Augmented Pixels develops augmented reality technology. This market is still in its initial phase of development, but analysts from ARChart research firm predict that in 2014 its volume will exceed $1 billion.
Founder and co-owner of Augmented Pixels, Vitaly Goncharuk told Forbes about his business and future plans:
– What is the history of the company?
– In 2003-2004, I worked as a programmer and project manager in the IT-company, Shape Services AG, in which I invited a lot of my friends and classmates. Then I left the IT-sector and worked in finance. In 2009, I decided to return to IT and financed several startups. Among them, there was a project on semantic analysis which entered the top 10 of the first Moscow TechCrunch, a project on augmented reality AR23D and several other startups. AR23D became successful. One of my partners developed a game called AR Basketball; on the basis of this game we started developing a separate company that was engaged in augmented reality. In 2011, we received a number of interesting orders and became profitable. Based in Odessa, our team consists of ten highly-skilled specialists, plus a few freelancers.
– What Technologies of Augmented Reality do you develop?
– Augmented Reality is a combination of reality and virtual elements. There are two main areas: mobile applications and B2B-solutions for retail. We focus more on the mobile area because these solutions easily find their way into mass production and can be sold worldwide. Nevertheless, we develop specific products for B2B as well.
– What specific solutions do you have in your portfolio?
– The first major order we received was in 2011 from the periodicals in Saudi Arabia. They were publishing augmented reality markers in magazines. By pointing a tablet or a smartphone at a marker, you could see a three-dimensional model or a video of the goods advertised. Later we have created an augmented reality browser GlorAR, which allows you to bind virtual 3D-objects to specific GPS-coordinates. We can place this model anywhere on the street near the monument or in the mall. Using mobile gadgets all users will be able to see it there. Third our product is AR Panoramas, this solution allows you to show a panorama of objects or the environment in augmented reality. For example, you can take a photograph of an interior of a car and then using our product show it on the tablet to users who will be able to feel themselves inside the car and allow them to look around. This solution is especially in demand by sales companies and real estate agencies. Our main focus is on games for mobile devices.
– How do you play the game with augmented reality? What is the physics of the process?
– For example, in one game a dragon is flying around you. If you point the tablet at the wall of the room, the dragon will be flying with a background of this wall, responding to the movement of the screen, growling when you press on it and so on. Using special algorithms, our product analyzes the surroundings and finds key points. When you move the device, the software keeps track of its path and automatically changes the picture. As a result, you have a feeling that an object that is on the screen is in the same room as you and responds to your movements.
– What markets do you work with? Who are your customers?
– We have no customers in Ukraine and Russia. It is very difficult to explain to someone here what Augmented reality is. Due to this, expenses for attracting customers are very high. Now that we have changed our orientation towards the mass market, we will work through the AppStore and Android Market. We have 5-6 B2B-customers the U.S., Europe and Middle East. Our key customer is the American GPIXA, owned by the founders of the Kerner Group.
– Were you intentionally looking for an investor?
– When a company becomes profitable so quickly investors come themselves. We were looking for interesting contacts and partnerships. AVentures Capital proved to be very adequate, they have necessary competencies.
– Did you raise money from local and international investors through this fund?
– Yes. Managing directors Andrew Kolodyuk and Eugene Sysoev will enter the board of company directors. In addition, we have been discussing the next round of investments in 2014 with more than ten international venture capital funds.
– What are the prospects for augmented reality market?
– Most analysts predict that in the next few years the market will show growth of up to two to three times per year. High quality applications have finally begun to appear on the market and are available to ordinary users. A second important trend is the development of special devices for augmented reality, in particular, Google Glasses.
-You are saying that you expect to occupy 10% of the global market of augmented reality in your niche. Which niche do you have in mind?
– We aim to get a 10% share from the whole market of mobile augmented reality. Plus we plan to gain a certain position on the market of B2B-solutions in the real estate and retail.
Links and references:
AR23D Studio – http://ar23d.com
Vitaliy Goncharuk – http://ua.linkedin.com/in/vactivity/
Aventures Capital – http://aventurescapital.com
Original interview (Ukrainian language) in Forbes/Ukraine Magazine can be found here.