Dutch company Morphotonics has raised €40 million in a funding round backed by 3M Ventures, Innovation Industries, BOM, and Invest-NL, with participation from the European Innovation Council Fund (EIC Fund), the Ernij Next family office, and the European Investment Bank (EIB). The company plans to use the funding to increase production of its equipment and enter the market for optical components used in data centers.
Morphotonics develops systems based on nanoimprint lithography (NIL), a process that uses a mold to transfer precise patterns onto photosensitive materials. The technology serves the production of displays and optical components, including waveguides used in augmented-reality glasses.
From Smart Glasses to Data-Center Components
Waveguides, thin pieces of glass or plastic that direct light along a specific path, are used to display images in front of the user’s eye. Morphotonics’ technology is linked to applications in products such as Meta Ray-Ban Display, Even Reality, and Magic Leap, as well as automotive privacy displays.
The company said smart glasses currently represent the most in-demand application for its technology. This comes as the market grows; data cited by the source indicated that smart-glasses sales in China doubled during the first eight months of the year, while IDC expects shipments of smart glasses equipped with displays to reach 12.2 million units by 2030.
At the same time, Morphotonics is expanding into co-packaged optics, a technology used in data centers to transfer data between servers and networking equipment through integrated photonic circuits that rely on light rather than electricity. The company has not yet shipped any machines for this application, but it said its customers have validated the technology for it.
Production Capacity and Operational Expansion
The extended funding round began in 2024 and was raised in installments. According to the company, the funding helped increase its workforce to 60 people, compared with approximately 30 employees in September 2024, with the number expected to stabilize later at 70 to 75 employees.
Morphotonics works with display manufacturers by selling equipment, licensing the production process, supplying chemicals, and providing operational training. Its customers’ manufacturing is concentrated largely in Asia, while it has teams in China, Taiwan, South Korea, and the United States.
The company is building a new machine that it says will be capable of producing more than 6 million waveguides annually, with shipments set to begin early next year. Current revenue comes mainly from equipment sales, which account for approximately 90% of total revenue, with between 10 and 15 systems deployed worldwide. The company aims to reach 50 deployments within two to three years, which could increase the contribution of services to its revenue.
Why Does This Matter?
The funding is significant because it supports Morphotonics’ transition from emerging display applications into two different industrial paths: producing smart-glasses components on a larger scale and testing their use in data-center optical infrastructure. However, the second path remains at the pre-commercial-shipment stage, so the company’s ability to turn customer validation into deployed machines and actual revenue remains an open question.