Touchstone Innovations : invests in WaveOptics

17 July 2017

Touchstone Innovations plc

Touchstone invests £3.1m in £12.0m Series B funding round in WaveOptics, a leading UK Augmented Reality company

Touchstone Innovations plc (AIM: IVO, 'the Group', 'Touchstone') has participated in a £12.0m funding round in WaveOptics Limited ('WaveOptics' or 'the Company'). Touchstone has committed £3.1 million to the round, alongside existing investors Robert Bosch Venture Capital GMBH and Octopus Investments, as well as new investor Gobi Ventures.

WaveOptics is a global business with headquarters in Abingdon, Oxfordshire in the United Kingdom. It is developing novel optical waveguide technology and modules for augmented reality displays. Augmented reality (AR) devices enable people to view the world around them, overlaid with relevant digital content.

Whilst a number of major manufacturers are building the full AR systems (including the optics, sensors, camera and head mounted unit), WaveOptics is focused on developing the underlying optics to deliver an enhanced AR experience, whilst solving some of the performance and cost challenges currently limiting AR technology adoption.

The core of the WaveOptics technology is a novel design of waveguide that is able to channel light input from a micro display positioned at the periphery of a glass, or in future via a plastic lens. Unlike conventional technologies that rely on cumbersome prisms, mirrors or scarce materials, WaveOptics' optical design harnesses waveguide hologram physics and photonic crystals, which enables lightweight design with unrivalled optical performance.

As at 31 January 2017, Touchstone had a 21.6% interest in the issued share capital of WaveOptics. Following this new investment Touchstone will hold a 23.8% interest in the Company. This investment will result in a net fair value gain of £0.97 million, which was included in the updated NAV figure published in the Trading Update of 14 July 2017.

Robert Bahns, Director of Technology Investment at Touchstone Innovations, said:

'WaveOptics' technology has the potential to open up the AR market by solving some of the key challenges to AR technology adoption.

'The Company has made significant technical and commercial progress since the investment round we led in October 2015, with very positive feedback from industry on its initial beta products.

'This new funding will allow the Company to complete its product development and position itself as a leader and key technology enabler of highly compelling AR experiences.'

Martin Harriman, Chairman of WaveOptics, said:

'WaveOptics is reinventing the AR market, by developing a series of new AR display technologies that enables a wider field of view and brighter full colour images - a unique combination in today's market. This funding round further accelerates development of our industry-leading technologies and enables us to launch programmes in new markets and territories.

'We are excited about the team of investors we have on board who share our vision.'

For further information contact:

Touchstone Innovations plc	020 3053 8834
Russ Cummings, Chief Executive Officer
Jon Davies, Director of Communications
Instinctif Partners	020 7457 2020
Adrian Duffield/Melanie Toyne-Sewell/Chantal Woolcock
J.P. Morgan Cazenove (Nominated Adviser)	020 7742 4000
Michael Wentworth-Stanley/Alec Pratt
RBC Capital Markets	020 7653 4000
Darrell Uden/Marcus Jackson/Laura White

Notes to Editors

About Augmented Reality

Augmented Reality (AR) can broadly be described as overlaying digital imagery onto the real world, whereby the real world is still visible. The aim of AR is to enhance one's current perception of reality, by overlaying information about the surrounding real world (such as sound, video, graphics or GPS data) over a transparent headset.

In contrast, Virtual Reality (VR) replaces the real world with a simulated one and uses a completely opaque headset such that the real world is not visible.

The AR market is expected to be worth more than$55 billionby 2020, which clearly indicates the great potential of this technology and its anticipated benefits, in the enterprise and consumer space.

About Touchstone Innovations -www.touchstoneinnovations.com

Touchstone Innovations plc (formerly Imperial Innovations Group plc) creates, builds and invests in pioneering technology companies and licensing opportunities developed from outstanding scientific research from the 'Golden Triangle', the geographical region broadly bounded by London, Cambridge and Oxford.

This area has an unrivalled cluster of outstanding academic research and technology businesses, and is home to four of the world's top 10 universities, as well as leading research institutions, the cream of the UK's science and technology businesses and many of its leading investors.

Touchstone supports scientists and entrepreneurs in the commercialisation of their ideas through protecting and licensing out intellectual property (through its Technology Transfer subsidiary, Imperial Innovations Limited), by leading the formation of new companies, by recruiting high calibre management teams and by providing investment and encouraging co-investment. Touchstone remains an active investor over the life of its portfolio companies, with the majority of its investment going into businesses in which it is already a shareholder.

Since becoming a public company in 2006, Touchstone has raised more than £440 million of equity from investors, which has enabled it to invest in some of the most exciting spin-outs to come out of UK academic research. In addition, the Group has drawn down the outstanding £50.0 million from the European Investment Bank (EIB) taking the total loan to £80.0 million.

Between admission to AIM (August 2006) and 30 June 2017, Touchstone has invested a total of £364.0 million across its portfolio companies, which have collectively raised investment of more than £1.5 billion.

About WaveOptics -www.enhancedworld.com

WaveOptics is a UK company committed to pushing the boundaries of optical science to make stunningly immersive Augmented Reality (AR) commercially viable and accessible to multiple industry partners.

Working at the cutting edge of current AR visual challenges, WaveOptics uses unique and patented waveguide physics to produce AR lenses with unparalleled display performance and all-day ergonomics, designed for real-world AR applications.

Founded by Sumanta Talukdar and David Grey in 2012 and headquartered in Oxfordshire, WaveOptics' aim is to deliver on the acknowledged potential of AR by creating superior optics that are highly scalable and designed specifically to the requirements of the end user.