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French cosmetics conglomerate L'Oreal is buying Canadian augmented reality and artificial intelligence firm ModiFace, which caters to the beauty industry.Francois Mori

When University of Toronto engineering professor Parham Aarabi first began researching face tracking technology, it never occurred to him that his resulting startup would later be snapped up by the world's biggest cosmetics company, L'Oreal.

In fact, Aarabi thought the initial application of what is now ModiFace's lip and eye tracking capabilities would be speech recognition in noisy environments, he said.

"What happened was I realized, and we initially realized, that this technology had a lot of use for cosmetic simulations," said Aarabi, ModiFace's chief executive, in an interview. "For example, showcasing lipstick products, because we had the exact boundary of the lips."

On Friday, 11 years after Aarabi founded the Toronto-based startup, L'Oreal announced it was acquiring ModiFace as part of its digital acceleration strategy.

The Paris-based beauty behemoth, whose 34 brands include Maybelline and Lancome as well as its namesake beauty products line, did not disclose financial terms of the acquisition.

ModiFace's technology is already being used by 100 brands and allows customers to try on beauty products such as lipstick or eyeshadow or do skin diagnoses via mobile app, online or in-store augmented reality mirrors. For example, customers can try on different hair colour shades by taking a photo or using their smartphone or webcam's video capabilities before making a purchase online or at the counter.

ModiFace uses artificial intelligence to help track the user's face and detect where the eyes and lips are, he said. AI is also used to track data, including colour selections and how that pertains to face and eye shape, said Aarabi.

The Toronto-based firm will be part of L'Oreal's Digital Services Factory, a dedicated network to design and develop new digital services for the group's brands, L'Oreal said.

"With its world-class team, technologies and sustained track record in terms of beauty tech innovations, ModiFace will support the reinvention of the beauty experience around innovative services to help our customers discover, try and chose products and brands," said Lubomira Rochet, L'Oreal's chief digital officer in a statement. "We at L'Oreal and ModiFace want to pioneer this new page of the beauty industry."

ModiFace now employs nearly 70 engineers, researchers and scientists, who have submitted more than 200 scientific publications and registered over thirty patents.

In addition to beauty brands, ModiFace is also being used by the likes of Samsung, which has equipped its newest Galaxy S9 smartphones with its augmented reality technology. Aarabi said ModiFace also has a partnership with virtual bulletin board platform Pinterest, but would not disclose more details as it is not public yet.

Even after its 100 per cent acquisition, ModiFace will remain based in Toronto to stay close to the University of Toronto where Aarabi continues to be a professor and where the firm has established research partnerships.

Last April, ModiFace invested $4-million to fund student internships and research at the university's engineering department.

"ModiFace became what it is because of the excellent engineering talent in Toronto... It's a great place to have a tech company. We're very much not only interested in staying here, but also growing here as well," said Aarabi.