Valuation increased over 137 times in 9 years, XREAL, along with its prestigious shareholders, is racing to become the "Number One Smart Glasses Company"

What are the key driving factors behind the myth of XREAL’s valuation?

“Science and Technology Innovation Board Daily” April 2 (Reporter Yang Xiaoxiao) As AI rekindles interest in the smart glasses sector, capital is also迎来了 the first possible realization window.

Recently, XREAL submitted its IPO materials to the Hong Kong Stock Exchange, aiming to become the “first stock in smart glasses.” If successfully listed in Hong Kong, the more than 20 institutional shareholders behind XREAL are expected to become the first investors to realize gains from the smart glasses boom. Meanwhile, this will also provide the first public market pricing reference for the reinvigorated smart glasses financing.

The IPO documents show that the shareholders of XREAL include almost all leading players from various types of funding sources. Financial investors include Sequoia China, Hillhouse Capital, Shunwei Capital, Yunfeng Fund, Hongtai Capital, China International Capital Corporation (CICC) Capital, and Everbright Holdings; industry investors encompass Taobao, Kuaishou, iQIYI, NIO, SenseTime, Luxshare Precision, Zhuhai Guanyu, and the Korean eyewear brand Gentle Monster; state-owned investment platforms such as China National Investment Fund, Shanghai Pudong, and Wuxi also appear among XREAL’s shareholders.

Notably, according to the IPO disclosure, the company’s pre-IPO investors’ shares are not subject to lock-up restrictions. This means that after listing, these investors who participated in multiple funding rounds can freely sell their shares.

From the valuation perspective, as financing continued, XREAL’s valuation in the primary market increased by over 137 times. This growth was not linear but concentrated at several key points.

First, during the early stages from 2017 to 2018. The company’s valuation jumped from about 63 million yuan at the angel round to 375 million yuan at Series A, a more than sixfold increase. In the Series A round, XREAL brought in new shareholders like iQIYI, and existing shareholders such as Shunwei and Hongtai made follow-on investments.

XREAL explained the reason for this valuation increase in the IPO materials, stating it was mainly due to the completion of lightweight AR glasses prototype development and the start of initial commercial revenue.

Next, around 2019, during the Series A+ round, the valuation further rose to approximately $130 million. The key milestone at this stage was the launch of XREAL’s first consumer-grade AR glasses available for sale. However, in this round, XREAL’s appeal in the primary market did not seem to increase significantly, as the main participants remained old shareholders like Shunwei and iQIYI.

The real leap occurred in 2021, when XREAL’s attention in the primary market changed markedly.

This was reflected not only in increased financing intensity—within just three months, the company completed B1 and C rounds of financing, with the C round setting a record for single-round financing at $125 million. During this round, XREAL brought in top investors such as Taobao, Yunfeng Fund, and China National Investment Fund. The company’s valuation also rapidly increased from $280 million at B1 to $570 million.

In addition to XREAL’s own expansion and shipment capabilities in overseas markets, this period also coincided with the overall industry valuation uplift driven by the metaverse narrative, with capital’s expectations for AR glasses as the next-generation terminal entry point reaching a peak. New players like Yingmu Technology and LeBird Innovation also entered the scene around this time.

However, after this, XREAL’s financing pace slowed. After completing the C+ round in March 2022, it was not until January this year that XREAL completed the D round of financing, which was also the last primary market financing before its IPO push. According to the IPO documents, the D round is still in the process of settlement, expected to be finalized in April. After this round, XREAL’s valuation reached $833 million, a 137.7-fold increase from the seed round’s post-investment valuation of 40.86 million yuan.

In total, since its founding in 2017, XREAL has raised approximately $320 million, and the company states that about 80% of the total funding has been utilized so far.

It is evident that XREAL’s capital trajectory is deeply embedded in industry cycles. The rapid rise in 2021 aligned with the metaverse hype; the subsequent slowdown in financing reflected the broader industry cooling; and the recent revival of AI-driven smart glasses enthusiasm—exemplified by companies like LeBird Innovation and Yingmu Technology, which announced financing progress from late 2025 into early this year—has allowed XREAL to secure new funding and officially launch its IPO campaign.

From a capital perspective, XREAL’s IPO attempt also serves as a phased test of past investments in smart glasses. The investment logic in this sector has evolved from the imaginative space created by the metaverse to multiple shifts driven by AI’s reshaping of valuation standards.

As XREAL moves toward the public market, not only will the exit returns for its financial and industry investors be tested, but it will also directly influence future capital allocation strategies in the smart glasses sector—whether to continue betting on the “next-generation terminal” or to revert to the valuation framework of consumer electronics.