WayRay, a resident of Skolkovo’s space cluster that makes augmented reality (AR) technology for cars, has raised $18 million in Series B financing led by Chinese e-commerce giant Alibaba Group.

WayRay's navigation system shows the driver directions on the windshield in a transparent holographic display. Photo: WayRay.

The startup has entered into a strategic partnership with Banma Technologies, which makes smart car solutions and is funded by Alibaba Group and China’s biggest automaker SAIC Motor, to develop a new AR navigation and infotainment system, WayRay said via a press release Tuesday.

“At the moment, WayRay is the world’s only developer that integrates augmented reality systems into cars,” said Vitaly Ponomarev, founder and CEO of WayRay.

“It gives us an advantage over traditional HUDs [head up displays] and provides the opportunity to collaborate with the largest global car brands.”

WayRay has developed an AR navigation system called Navion in which directions are shown on the windshield in a transparent holographic display, meaning the driver does not have to take their eyes off the road to look at the navigation system display.

The Russian-Swiss startup plans to release a consumer version of Navion this year, and to sign contracts with major global car manufacturers to implement its infotainment system, said Ponomarev.

Under the agreement with Banma Technologies, WayRay will work closely with the consortium to create an advanced AR human-machine interface that integrates augmented reality navigation, driving assistance notifications, a virtual dashboard and more, the press release said. The new system will be built into one of Banma’s 2018 car models, making it the world’s first vehicle in production with a holographic AR HUD.

“Augmented reality HUDs are the future of car navigation systems,” said Alex Shi, CEO of Banma.

“Rather than distracting the driver, AR navigation actually improves safety as the warnings and traffic data are placed right on the windshield. Moreover, with the rise of self-driving cars and enhanced auto control mechanisms, AR systems will enhance entertainment and communication within the car. We believe that WayRay’s AR systems will bring us one step closer to advanced connected cars,” said Shi.

“We believe there is huge potential in the development of leading-edge technology like augmented reality and its application to various industries, like WayRay’s AR navigation system in the auto sector,” said Ethan Xie, senior investment director of Alibaba Group.

“The potential of augmented reality makes it an exciting and promising area,” he added.

WayRay, which is headquartered in Switzerland with offices in Moscow, San Francisco and China, is also working on another product, Element: a compact dongle that works with an app to give drivers feedback on their driving. Described by the company as “a personal driving coach,” Element compiles statistics on the driver’s performance with the aim of helping the driver to improve. It can also help drivers to find their cars in large car parks.