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XR headset & software developer Varjo gets $40M in funding

Varjo, which develops highly sophisticated hardware and embedded firmware for a wide range of business and industrial applications, has recently raised $40 million in a Series D round of funding.

The company plans to use this money to fund further research and development for its headsets, as well as, for the Varjo Reality Cloud, a streaming platform it launched earlier this year. The company’s headquarters are in Helsinki, Finland, and its backers in this round include a number of major investors from the area.

The investors include Lifeline Ventures, EQT Ventures, Atomico, and Tesi, the VC and PE fund of Finland’s Government. Some others involved include strategic backers such as Mirabaud and Foxconn, who are joining the group, with Varjo referring to both companies as strategic partners. It is unclear right now in what capacity Foxconn is working together with Varjo. However, Timo Toikkanen, the latter’s CEO, stated in an interview that Foxconn is a prospective manufacturing partner for its products.

Varjo declines to disclose the valuation, but PitchBook data suggests that its most recent round, amounting to $54 million two years back, raised its validation to $146 million. Toikkanen, who oversaw all of Nokia’s mobile phone operations both before and after Microsoft purchased the company, said the new valuation is satisfactory. Investors believe that although the business has been solid for some time, a major shift is about to occur.

Varjo board member and EQT Ventures partner Ted Persson spoke to technology magazine TechCrunch about the funding and future prospects. He said that in order to scale its versatile immersive virtual reality (VR) and mixed reality (XR) solutions across industry sectors, Varjo is moving into a new era. He emphasised that, for specialists, this will be a revolutionary step, opening the door to a metaverse-like future which might revolutionise work and cooperation.

Varjo is notable for being an independent company, and a firm that has so far received considerable recognition for its work. Whilst it has had its setbacks in terms of using the funding it has received to date, the new round of investment can open up broader avenues for the company. So far, the company has managed to raise sums of about $150 million since its establishment back in 2016. This is notable in a hardware market that is monopolised by big software firms, especially in the arena of VR hardware. Currently, there is no information regarding if any buyer has reached out to Varjo for a possible buyout.

According to Persson, the company’s hierarchy is content with the steps being taken by it toward future progress. He talked about the upsides of the company operating as an independent entity, saying that the growth is positive and they are aptly meeting the demands of customers. Maybe the freedom has also given the business a sharper focus. Some contend that the quality of such attempts has been inconsistent since a lot of XR players have concentrated on headsets and consumer applications.

More news is expected regarding Varjo’s efforts in the XR and AR domains in the future.

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