Augmented reality startup Magic Leap gets a reset with new funding
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.
Jessica Mathews compiled the IPO and SPAC sections of this newsletter.
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