Background and challenge 

A leading private equity firm was considering an investment in an augmented reality (AR) product manufacturer.

The client engaged L.E.K. Consulting to provide insight into trends impacting the AR market, evaluate the business model and growth prospects of the target company, and conduct an assessment of the competitive technology landscape.

Approach and recommendations 

We first leveraged primary and secondary research to identify key trends in the AR market and discovered several market-specific barriers that suggested a slower adoption curve than the target company had initially forecasted. This insight revealed a challenge to the target’s commercialization prospects and revenue forecasts.

Additionally, we held discussions with the target’s management team to evaluate the viability of its business model. In particular, we assessed the value proposition, key partnerships and target market to determine the likelihood of future success.

We then conducted an interview campaign with AR end users/competitors and industry experts to assess the competitive dynamics and technological landscape of the AR industry, measuring the target and competitors against key factors such as:

  • Price positioning
  • Key partnerships
  • Hardware specs (e.g., field of view, weight, holographic resolution)
  • Funding and resources

Ultimately, we determined that despite its market-leading technology, the target faced strong market headwinds and competitive pressures.


As a result of our analysis, the client was confident in making an informed go/no-go decision on the investment.

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