Neither company confirmed the value of the acquisition, but the Globe and Mail, which first reported on the pending acquisition last week, quoted sources as saying the deal was around $180 million. North had raised close to $200 million in a mixture of equity, debt, and grants, so if the reported acquisition price is accurate, this is pretty much a fire sale.
As a result of the acquisition, North will wind down its business and its team will join Google’s existing hub in Kitchener, Ontario, where North is based. Google didn’t share specifics about what it has in store for North’s technology, but Rick Osterloh — senior VP for devices and services at Google — said North’s technical expertise will “help as we continue to invest in our hardware efforts and ambient computing future.”
Out of focus
North, which was founded in 2012 as Thalmic Labs, was originally known for a gesture- and motion-guided device called Myo. The $200 armband enabled people who had amputated limbs to control a prosthetic hand and surgeons to navigate screens while carrying out complicated surgery. In 2016, Thalmic Labs raised a hefty $120 million in funding from Amazon’s Alexa Fund, Intel Capital, and Fidelity Investments Canada. It rebranded as North in 2018 while simultaneously pivoting to holographic eyewear.
North’s first product, Focals, were glasses that connect to the user’s smartphone over Bluetooth to display key notifications directly in the wearer’s field of view — including weather, calendar notifications, messages, turn-by-turn navigation, and more. A separate connected ring — called Loop — was required and allowed users to control the glasses by clicking with their finger. The glasses also sported a built-in mic that let the wearer ask Alexa questions, with answers delivered on the display or via a little speaker.
North’s business model encountered friction from the outset. Besides the $999 price tag, Focals required custom fitting in physical retail stores, which there were only two of — one in Toronto and one in New York. The company soon scythed the starting price to $600, and it laid off some 150 employees to cut costs in early 2019. A month later, news emerged that North had raised $40 million in debt financing. Last September, North started selling its Focals AR glasses online, leaning on the iPhone’s TrueDepth camera to help custom-fit the frames remotely.
While the writing was already on the wall, in December of last year North stopped selling Focals altogether and revealed that a new “sleeker” design would be launched sometime in 2020. That, however, never materialized. In a separate blog post today, North’s founders said that the company was winding down Focals 1.0 — which presumably means it will no longer offer support for existing users — and that it would not be shipping Focals 2.0 as planned.
The Globe and Mail cited a number of former North employees, who spoke to the Canadian publication on condition of anonymity. According to these sources, company executives made “many questionable decisions” in the Focals rollout, including rushing the product to market before it was ready and failing to find a proper product-market fit.
Google is no stranger to augmented reality (AR) eyewear, of course, mostly via Google Glass, which it first unveiled way back in 2013. Though Google Glass didn’t quite work out as a consumer product, Google later repositioned the product for the enterprise, where the company still hopes to gain traction across manufacturing and other industries. It’s also worth noting that other companies have struggled with AR headsets, including the heavily funded Magic Leap, which recently announced significant layoffs and a refocus to the enterprise. Last year, Daqri — an enterprise AR headset startup — announced it was shutting down.
The takeaway seems to be that AR either isn’t quite ready for prime time, companies have yet to deploy it in a way that makes sense for consumers, or people simply don’t want constant alerts in their direct line-of-sight.
North’s closure also raises questions about what this deal means for those who shelled out $1,000 for the glasses less than two years ago. VentureBeat has reached out to North and Google for clarification on whether any support or compensation will be provided.