Japanese augmented reality outfit Tonchidot has announced it has closed a $12 million funding round, with existing investors joined by four new firms - KDDI Corporation, Recruit, SpiRE, and JAFCO.

Tonchidot says the new money will be used to expand its presence overseas, building on existing portfolio of apps and engines for iPhone and Android.

Riches in reality

"We are excited about opportunities to greatly enhance user experience while combining traditional mobile social games with location based services and AR technologies," said CEO Takahito Iguchi.

"We have taken social gaming to a new level from the computer screen to the real world where friends can visit a flourishing farmland, interact with adorable pets, and swim through a customised fishtank, all in the middle of Tokyo."

Tonchidot's first AR app, Sekai Camera, launched on iPhone in 2009, following up on Android in 2010.

Tonchidot has also launched a dedicated AR platform, SoLAR, allowing mobile developers to implement elements of augmented reality directly into their titles.

The third wave

It's Tonchidot's role in forming a major part of the so called third wave of mobile innovation that the firm's investors believe will drive it forward, however.

"We're seeing tremendous opportunity evolving for mobile gaming globally," said investor Osuke Honda from investor DCM.

"The first wave of mobile gaming innovation started in Japan, the world’s most advanced market for mobile services, with Japanese social gaming companies like GREE and DeNA. The second wave, which is currently gaining traction in the US, came with popular location-based companies like Foursquare and Booyah.

"We firmly believe that Tonchidot, with their new augmented reality social gaming platform, will drive the third wave of mobile gaming innovation globally."

You can see how its technology works in the following video.