RestAR acquisition by Unity a potential landmark for Israeli gaming

U.S. company Unity announced earlier this month the purchase of Israeli startup RestAR for an unknown sum. On the face of it this seemed like yet another standard commonplace story of an exit by an Israeli tech startup. However, the case of RestAR could well be remembered as an important landmark in the history of the Israeli gaming industry.

RestAR initially provided solutions for businesses in the restaurant industry by building 3D/AR (augmented reality) menus, which is why it has both 'Rest' and AR in its name. However, the startup soon realized that the real challenge lies in creating 3D content for the e-commerce market and that the sector lacks an efficient solution. For example, a shoe store can scan sneakers with RestAR's app to create a 3D model and the client can then use the app to demonstrate how the shoe would look on them with the help of AR.

Unity, which went public in September and has since more than doubled its valuation, currently being traded at a value of $42 billion, has also undergone several pivots since it was founded. Unity was initially set up as a studio that develops games. Its first and only game failed, but the developers identified value in something else which they created along the way: the development environment in which they built the game. This environment - Unity's gaming engine - was accessible and relatively easy to use compared to what was then common in the market, which was the result of the founders' wish to democratize gaming development. In addition, they were lucky to find themselves in the right place at the right time. When Unity was set up in 2005 it targeted Mac computers, which were, and still are, an unpopular platform for gaming. However, two years later this put them in an ideal position to become a leading tool to create games for Apple's super-popular iPhone. This success would eventually lead to Unity dominating the entire mobile market. This market has grown considerably over the years and currently makes up about half of the gaming industry. The success in mobile helped Unity to reach more and more developers and currently more than half of the games being built today are created on its platform.

Over recent years additional industries, apart from gaming, also began using Unity, as well as the tools being offered by its competitors, and these sectors have become a growing focus for Unity. Architecture, interior design, and auto manufacturing, for example, are just a few of the industries that realized that a tool that allows them to build 3D worlds and navigate them in real time would serve them well. Unity no longer calls its tool a "gaming development engine" but a "real time development platform". And this isn't just about branding. Two weeks ago the company released a product named Unity Forma which is meant for marketing experts and allows them to process 3D content into realistic marketing materials, both from a visual and a behavioral standpoint.

This is in essence what brought Unity to RestAR, which was founded three years ago by Bar Saraf and Shimon Vainer. The Israeli startup’s vision of 3D scanning integrates naturally into the new and old needs of Unity.

"Say you want to scan an oven, car, shoe, or whatever, you need to scan the object and then manually create a 3D model. That isn't practical. We came with a different approach," Vainer told Calcalist. "We thought it would be easy, for example, taking a hamburger, scanning it into Unity and then building an application around it. The application part was easy, but the scanning turned out to be far more challenging."

The big challenge was to automatically turn what was scanned into a 3D model. Vainer noted that this is a problem that dates back to ancient Greece. "Philosophers would see a point in the distance and ask themselves how can they tell if it is accurate? The modern version of this problem is 3D scanning. If the attitude until now was 'here is the object, create a model of it', now we look at it differently. Say you are an independent game developer. You no longer need to buy or create models of a stone, chair, or a building, which in the case of a big game can end up being tens of thousands of models. Instead, you can give a 3D developer a system that can create an endless collection of stones and they will just choose the most successful ones and fine-tune them."

What is the significance of the acquisition to the continued development of your product?

"We are continuing to work on it, but we are just integrating it with all of the products and resources of Unity," explained Saraf. "As far as Unity is concerned, as soon as we expand and acquire more clients we will branch out into additional sectors. For example, that game developers will also be able to scan objects for their games and that every developer will be able to work without a 3D studio. We are continuing to focus on what we have done until now, but are also becoming Unity's R&D center in Israel. As soon as we complete the recruitment of new developers, most of them deep learning developers, we will be able to move forward and strengthen the local Unity community and bring over people from Unity global and hold conferences."

The vast majority of game developers in Israel use Unity and are building games for mobile. Did Unity's wish to have a stronghold in Israel play a role in your acquisition?

"Yes. Unity has wanted to set up an R&D center in Israel for a long time and was also interested in other companies. They clicked with us because there was compatibility in culture and product. They wanted a completed product that is already working in the market, something that would give them a competitive advantage in a sector that they are still not present in. We always believed that Unity was the ideal buyer for us, and we reached a deal with them very quickly."

What is the significance of a Unity R&D center in Israel?

"Firstly, it means that we will be able to recruit people for Unity's different departments, whether in San Francisco or New York. These employees will be able to work from Israel together with these different departments. This opens up the possibility for developers in Israel to work for Unity without having to relocate."

For Vainer, the potential of this collaboration also takes him back to his personal roots. "In heart I always was, and probably always will be, a game developer and a graphics man," he explained. "I'm always looking for the interface between the two, how to take this technology and how to bring over something from Unity. There are many opportunities and I'm only now discovering this massive company. I don't know what Unity's plans are in Israel, but they are very excited about the talent that we have in its areas of expertise. I'll also say something from the heart: I'd really like to see a TripleA game being developed in Israel and it will be interesting to see how Unity's entrance into Israel will affect this."