EXCLUSIVE: AR startup Zappar lands $3.75m Series A

Tech City News can exclusively reveal that augmented reality startup Zappar has closed a $3.75m Series A round led by Hargreave Hale.

Trade investors You & Mr Jones and iDreamSky – a Chinese independent app developer – also joined the round.

Co-founder Caspar Thykier may be certain that both the technology and his company have a bright future ahead, but he’s also adamant that raising from investors is a challenge.

“It is particularly challenging when you are the size of company that we are, where you are growing quickly, and as a management team, you have to keep the business going while spending what is actually an awful amount of time going through the process,” he said.

In his case, Thykier said he was grateful to have been able to tap into a network of advisors, both external and internal, who proved invaluable throughout.

Focusing on the desired outcomes, he noted, also helped him and the team: “We were very clear from the start on the types of investors that we would like to have involved in the business and the type of structure for that investment.”

Thykier declined to disclose Zappar’s valuation but claimed the company, mostly self-funded, is profitable.

“We are one of those old school companies that like to make money, not just spend it. It seems to be rare in this digital age,” he quipped.

The state of AR

Zappar may be on a mission to democratise AR, but there’s no denying the technology is still in its relatively nascent stages.

The explosion of mobile has allowed consumers and companies to wake up to the fact that AR can re-define the relationship between the physical world and digital devices and how these can be connected to provide better content and improved experiences.

“AR is still a new technology. A lot of people haven’t experienced it yet, there’s still a big education job to do,” Thykier said, noting that part of Zappar’s mission was also to educate the masses on on the tech’s potential.

In order to deploy AR successfully, Thykier believes there are three fundamental pillars that must be in place: context, a call to action and amazing content. But, is there a killer app that can help catapult the technology into the mainstream?

“I kind of always shy away from that question. I think AR is an enabling technology, but it’s not a panacea or a silver bullet,” Thykier commented.

We should, by now, be getting to the point where AR is robust, quick and fast on the majority of devices. But while access to the technology has undoubtedly improved, Thykier still believes there’s room for improvement in terms of the quality of content that is being delivered.

With the funding, Zappar intends to continue developing a suite of products; including ZapWorks, a content authoring platform.

Expansion plans

The London-based firm, which currently employs 31 people and has offices in San Francisco and Syndey, will also use the money to expand internationally.

Now it has a Chinese investor in tow, is Zappar looking to crack the Asian market?

“It’s a lusty goal,” Thykier said, noting that the team was interested in China but not primarily focused on targeting this market.

“It’s certainly somewhere we’ve had interest from our existing clients. If you look at the proliferation of QR codes and the way scanning is adopted in the Far East … it’s very very attractive to us given the work that we do,” Thykier added.

Cracking the Chinese market comes with its challenges, though. So, while Thykier believes his company is strong and the business now has a partner on board that could help it navigate the Chinese market, the co-founder is not planning on cracking it quite yet.

For now, Thykier will focus on growing his teams and improving his product.