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Augmented reality startup Magic Leap gets a reset with new funding

October 12, 2021, 12:34 PM UTC

Magic Leap began its life in 2011 as a mysterious augmented reality startup from Florida that managed to raise an estimated $3.5 billion.

But then the magic wore off as it missed product launch dates. It’s $2,300 headset failed to sell. Questions about the viability of augmented reality rose. Investors wrote down their stakes in the company. Then founder Rony Abovitz resigned in May 2020, with Microsoft executive Peggy Johnson replacing him as CEO.


On Monday, the company now under Johnson has, keeping to its DNA, raised a mysterious $500 million round of funding from unnamed sources. 

While the company is not dead, the round is a sign of just how much of a reset Magic Leap has faced. The new round, per the company, values it at about $2 billion—less than the totality of what the company has raised in its lifetime, and a valuation that harkens back to 2014, when the company raised at a reported $2 billion valuation with Google leading the round. At one point, the company—backed by the likes of Kleiner Perkins and Andreessen Horowitz—was reportedly seeking to sell itself at a $10 billion valuation.

Now Magic Leap plans to roll out the next generation of its headset, which is designed to be lighter with a broader field of view, and will ship in 2022.

Of note: This deal comes as Magic Leap has increasingly focused on its enterprise customers rather than its consumer base, and as Facebook has signalled that it sees a future in augmented reality increasingly in the workplace with the launch of its Horizon Workrooms app.

“This investment is an important step in advancing Magic Leap’s mission to transform the way we work,” Johnson said in a statement Monday.

As the pandemic pushed startups into a V-shaped bounce, it seems, so has Magic Leap. The question is, will its second generation headset hold up?

OATLY LEARNS IT’S HARD TO BE GREEN: My colleague Katherine Dunn dives into Oatly, and allegations the company has faced regarding greenwashing. The bottom line? ESG claims in general are a squishy problem, but one that deserves to be codified.

Lucinda Shen
Twitter: 
@shenlucinda
Email: 
lucinda.shen@fortune.com

Jessica Mathews compiled the IPO and SPAC sections of this newsletter.

VENTURE DEALS

- Plume, a Palo Alto-based company looking to improve broadband connectivity in homes, raised $300 million. SoftBank Vision Fund 2 led the round valuing it at $2.6 billion. 

- Personio, a European HR software company for small and mid-sized businesses, raised $270 million in  Series E funding, valuing the company at $6.3 billion. Greenoaks Capital Partners led the round and was joined by investors including Altimeter Capital and Alkeon. 

- Bond Vet, a New York City-based veterinary care clinic operator, raised $170 million. Warburg Pincus led the round.

- Hailo, a Tel Aviv-based A.I. chipmaker, raised $136 million in a Series C funding round led by Poalim Equity and Gil Agmon. 

- Hubilo, a San Francisco-based virtual events and gathering software startup, raised $125 million in Series B funding. Alkeon Capital led the round and was joined by investors including Lightspeed Venture Partners and Balderton Capital. 

- Battery Resourcers, a Massachusetts-based battery recycling company, raised $70 million. Orbia Ventures and Koura led the round.

- Open, an Indian neobank, raised $100 million in Series C funding. Temasek led the round and was joined by investors including Google, SBI Investment, Tiger Global and 3one4 Capital.

- Convex, a San Francisco-based software company focused on commercial contractors, raised $39 million in Series B funding. Fifth Wall, Emergence Capital, and GGV led the round and were joined by investors including UP2398, 1984 Ventures, and Soma Capital. The company also raised $17 million in Series A funding last year with Emergence Capital.

- Elliptic, a London-based cryptoasset risk management startup, raised $60 million in Series C funding. Evolution Equity Partners led the round and was joined by investors including SoftBank Vision Fund 2, AlbionVC, Digital Currency Group, Wells Fargo Strategic Capital, SBI Group, Octopus Ventures, SignalFire, and Paladin Capital Group. 

- SupportLogic, a San Jose, Calif.-based customer experience company, raised $50 million in Series B funding. WestBridge Capital Partners and General Catalyst led the round and were joined by investors including Sierra Ventures and Emergent Ventures.

- Zest, a London-based EV charging company, raised £30 million in funding. Zouk Capital invested.

- Tundra, a San Francisco, Calif.-based online wholesale marketplace, raised $26 million in Series B funding. Emergence Capital led the round and was joined by investors including Redpoint, Initialized, Peterson Ventures, and Background Capital. 

- Atomic, a Salt Lake City, Ut.-based payroll startup, raised $22 million in Series A funding. Core Innovation Capital led and was joined by investors including Portag3 Ventures and Greylock Capital Management.

-  Shift5, an Arlington, Va.-based cybersecurity company, raised $20 million in Series A funding. 645 Ventures led the round and was joined by investors including quadra Ventures, General Advance, and First In. 

- FrankieOne, an Australian fraud prevention company, raised $16 million (AUS$20 million). AirTree Ventures and Greycroft led the round and were joined by investors including 20VC, Reinventure, Tidal Ventures, APEX Capital and Mantis.

- Mondu, a Berlin-based B2B payments company, raised $14 million in seed funding. FinTech Collective and Cherry Ventures led the round.

- WattBuy, a New York City-based clean energy company, raised $10 million in Series A funding. SE Ventures led the round and was joined by investors including MCJ Collective. Other investors include Evergy Ventures, Updater, Powerhouse Ventures, Techstars Ventures, Avesta Fund, and Yoav Lurie (former CEO and founder of Simple Energy).

- Cytrio, a Boston-based data privacy startup, raised $3.5 million in seed funding. Investors include Dreamit Ventures, Food Retail Ventures, and Rockwood Group.

- Day-J, a San Francisco-based personalized coaching startup, raised $2.1 million. Raine Ventures, Fuel Capital,  and Watertower Ventures. 

- SUMA Wealth, a Los Angeles-based Latino youth-focused fintech, raised $2 million in pre-seed funding. Chingona Ventures led the round.

- Project Venkman, an Austin-based e-commerce tech maker, raised $3 million in seed funding. Valor Equity Partners, Valor Siren Ventures and Chive Media CEO John Resig invested.

- Pathway Medical, a New Castle, De.-based medical information app maker, raised $1.6 million. Investors included Panache Ventures, Amplify Capital, Desjardins Venture Capital, BoxOne Ventures, and Formentera Capital

- Fika, a Vietnam-based dating app, raised $1.6 million in seed funding. VNV Global led the round.

PRIVATE EQUITY

- Nice, backed by First Capital, acquired Nortek Security & Control, a Carlsbad, Calif.-based maker of physical security tech, from Melrose Industries for $285 million.

- Warburg Pincus invested $200 million in Tiptree’s (NASDAQ:TIPT) insurance subsidiary, The Fortegra Group. Financial terms weren't disclosed.

- Fenix Parts, backed by Stellex Capital Management, acquired assets of University Auto Recyclers, a Pensacola, Fla.-based automotive recycling company. Financial terms weren't disclosed.

- Two Sigma Impact acquired Eclipse Advantage, a Melbourne, Fla.-based provider of outsourced supply chain software. Financial terms weren't disclosed.

- ​​Wellspring Capital Management acquired Pentec Health, a Philadelphia-based sterile compounding business. Financial terms weren't disclosed.

EXITS

- American Securities acquired Trace3, an Irvine, Calif.-based technology consultation and services provider, from H.I.G. Capital. Financial terms weren't disclosed.

- Ardian agreed to acquire Adamo, a European fibre optics operator, from EQT, for over €1 billion. Financial terms weren't disclosed.

- Ornua acquired Whitehall Specialties, a cheese ingredients business, from Mason Wells. Financial terms weren't disclosed.

IPO

- Syngenta Group, a Swiss agriculture technology company, halted its IPO in China after the Shanghai Stock Exchange requested an update to its application, per Bloomberg. The firm had planned to raise $10 billion in the offering—which could make it the largest IPO in the world this year. China National Chemical owns the firm.

- Leapmotor, a Chinese electric vehicle maker, is weighing an IPO in Hong Kong as soon as next year, per Bloomberg. An offering could raise at least $1 billion. Zhejiang Dahua Technology and Sequoia Capital China back the firm.

- Xiaohongshu, a Chinese lifestyle content company, is weighing an IPO in Hong Kong after postponing its listing in the U.S., according to Bloomberg. An IPO could raise $1 billion for the company. Tencent Holdings and Alibaba Group back the firm.

- Horizon Robotics, a Chinese A.I. chip company, is weighing moving its IPO to Hong Kong from the U.S. as early as next year, according to Bloomberg. The company had considered raising as much as $1 billion in a U.S. listing. Intel backs the firm.

- GQG Partners, a Fort Lauderdale, Fla.-based global investment boutique plans to raise $956 million in an Australian IPO, per Bloomberg. Pacific Current Group backs the firm.

- Concord Resources, a commodity merchant trader in the UK, is weighing an IPO for 2022, according to Bloomberg. Pinnacle Asset Management, Pala Investments, MKS PAMP Group, and partners of Ospraie Management back the firm.

- Judo Capital Holdings and shareholders of Judo Bank, an Australian business lending fintech, plan to raise approximately $477 million in a Sydney IPO, per Bloomberg. Sing Glow Investment Pte backs the firm.

- MTN Uganda, a telecommunications network company in Uganda, is offering 4.5 billion shares priced at $0.0558 per share, according to Reuters. The offering is the largest IPO in Uganda and would value the firm at $1.3 billion.

- Ideal Image, a Tampa-based cosmetics firm, is weighing an IPO, per Bloomberg. TPG Growth backs the firm.

F+FS

- Yunqi Partners, a Shanghai-based early-stage investment firm, raised about $300 million for Yunqi Partners Fund III.

- 2150, a European venture capital firm, closed its first fund with $312 million.

- Newark Venture Partners, a Newark, N.J.-based venture capital investor, raised $85 million for its second fund.

PEOPLE

- Agent Capital, a Waltham, Mass-based life sciences investment firm, named John Orloff as a venture partner.

- Tribe Capital, a San Francisco-based venture firm, named Paul Lee as a partner.

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