Magic Leap, the multi-billion dollar AR startup, could be exploring the possibility of a sale, a Bloomberg report maintains, citing people familiar with the matter. Other options reportedly under consideration are potential partnerships and a stake sale.
The Plantation, Florida-based company has raised $2.6 billion since its initial Series A financing in 2014, garnering cash from the likes of Google, Alibaba, Qualcomm, and Andreessen Horowitz over the years. The company’s deep pockets funded the release of Magic Leap 1, an AR headset targeted at developers, enterprise, and anyone with $2,300 to spare.
Bloomberg maintains the company has valued itself at “more than $10 billion if it pursues a sale,” its sources say, noting that the company has contacted an adviser to consider strategic options.
A meeting was also allegedly held between Facebook and Magic Leap, however Facebook was uninterested in acquiring Magic Leap at the time.
When asked for whether the company was pursuing a sale or not via Twitter, Magic Leap Founder & CEO Rony Abovitz declined to answer.
https://twitter.com/rabovitz/status/1237986910729113600
In the same breath, Abovitz isn’t shying away from hyping the company’s forthcoming Magic Leap 2 headset, which he says is nearing release to select partners this year. A wider launch is said to come a some point in 2021.
Further underlining the company’s resolve, Abovitz even goes as far to reveal that Magic Leap 3 is currently in its R&D phase—an unorthodox strategy to be sure, talking about its third device even before getting number two out the door; companies typically talk about one product generation at a time, but then again, Magic Leap clearly isn’t like other companies.
If Magic Leap is indeed looking for a parachute amid reportedly slumping sales of its $2,300 AR headset, it comes as no surprise. The company struck an all too hopeful tone with when it first released its ‘Just another day in the office at Magic Leap’ video in 2015 (retroactively renamed ‘Original Concept Video’) which painted a rosy picture of the near future of the company’s then mysterious AR headset.
Upon launch of Magic Leap One (now Magic Leap 1 – don’t ask) in 2018, the headset saw a tepid release, with Oculus founder Palmer Luckey serving up a scathing review of the headset, criticizing it for its HoloLens-adjacent FOV and function, and concluding that while overall a solid device, it simply didn’t deliver on the hype.
In the company’s defense, Magic Leap has been spinning its fair share of plates. It’s built a real, live, totally-not-vaporware device, and has funded the creation of apps for years targeted both at enterprise and consumer segments—despite it in no way being accessible to consumers. It’s created its own OS, SDKs and everything else needed to get the product off the ground and into the hands of developers. Making what must have been substantial investments in R&D, premium content and developer tools isn’t anything to sneeze at, although it’s clear the company hasn’t seen the return on investment. And it probably won’t until it can at least replicate the success of Microsoft’s purely enterprise-focused HoloLens headsets.
