By / Janko Roettgers, Protocol

Everything went wrong for Daqri. The startup rode a wave of augmented reality hype and about $300 million in funding to a series of half-baked products before failing spectacularly and shutting down last year.

One of Daqri’s last remnants was recently acquired by Snap. The company confirmed to Protocol that late last year it took on certain Daqri assets and about two-dozen employees, who now work in the company’s newly opened Vienna office under the leadership of former Daqri CTO Daniel Wagner. Snap didn’t disclose the purchase price, but the timing lines up with a $34 million acquisition disclosed in its annual report to shareholders.

In interviews, more than 10 former employees detailed Daqri’s demise. In its decade of existence, the company built a retro-futuristic augmented reality helmet with a hefty $15,000 price tag, used fancy videos to sell the world on visual computing, and acquired a series of other startups in offices around the globe, only to see it all slip away when its glossy AR dreams collided with reality. It’s a story that anyone working in the AR and VR space should take to heart, if only to avoid a similar downfall.

The early days, and a big pivot

Daqri launched in 2010 as an early mobile AR company that used QR codes and real-world objects to create interactive experiences on smartphones. Its first projects included a multiyear partnership with Crayola, which used Daqri’s technology to turn coloring book pages into digital 3D objects on your phone.

The company also worked on a platform to let others develop their own AR content and experiences, but executives quickly realized that they were way too early for consumer AR. In 2014, a Kickstarter campaign for Daqri-developed interactive blocks attracted fewer than 200 backers, which was enough to fund the project but hardly a critical mass.

That’s when company executives decided to change course and focus on businesses instead of consumers. It’s also when Daqri started to get massive cash infusions from Tarsadia Investments, a Southern California-based private equity company. And, according to a number of its former employees, it’s when a lot of Daqri’s troubles started. 

Former employees who talked to Protocol all did so on the condition of anonymity for fear of retaliation, including from the company’s main funder, which still…

Read more at www.protocol.com/daqri-snap-ar-failure