The Chinese e-commerce giant Alibaba is acquiring the Israeli augmented reality software startup InfinityAR, the two companies announced today.
The financial details of the acquisition were not disclosed, but local media citing market sources estimate that Alibaba, an existing shareholder in the company, paid more than $10 million in the deal. It is estimated that the acquisition was carried out at a lower value.
In 2016, the company raised an $18 million investment in which $15 million comes from Alibaba for 22%, in company value of $ 80 million after money, and Japanese entertainment company Sun Corporation invested another $3 million.
The company has raised $25 million to date and currently has 25 employees who will join Alibaba’s Israel machine vision lab which currently has 20 employees. Previously, the company traded on the over-the-counter exchange in New York at a company value of $9 million.
InfinityAR was founded in 2012 by Moshe Hogag while its co-founders CEO Moti Kushnir and Dr. Matan Proter joined later.
Kushnir and Proter joined the company after working on an open platform for mobile application developers of laminated reality, an idea conceived by Kushnir. They joined Hogeg and decided that instead of setting up a company, they would join InfinityAR and manage it.
Alibaba opened an R&D center in Israel about a year ago under the company’s research body, called DAMO Academy.
The Chinese Internet giant has invested $15 billion in the establishment of eight research and development centers in the areas of artificial intelligence, quantum computing and Fintech around the world – and in Israel as well.
The Israeli Center focused on the fields of computer vision, artificial intelligence and machine learning under the direction of Prof. Lihi Zelnik Manor of the Technion. In the past year, the lab has worked in cooperation with Tel Aviv University on research in the areas of video analysis and machine learning.
After the implementation period of the InfinityAR team at the Israeli Research Laboratory, which is expected to last about six months, Kushnir will leave the company. The InfinityAR team will focus on Alibaba’s research tasks and will not continue developing its product. However, Alibaba has made it clear that it will continue to honor InfinityAR’s existing contracts, which have individual customers in Asia.
According to Globes, another investor in the company is Platinum Partners, the hedge fund of ultra-Orthodox billionaire Mori Haberfeld, Uri Landesman and Mark Norlicht, who were arrested on suspicion of a $1 billion fraud in a New York fund in 2016. Haberfeld pleaded guilty in May 2018, and the trial is expected to take place this year.