Even rounds like Uber’s Series C pale in comparison to this deal. What does Magic Leap have up their sleeve?
Augmented reality sorcerers Magic Leap announced today that they have closed their massive Series C round with $793.5 million in new funding. With the new cash in their coffers, the Florida-based company is now said to have reached a valuation of $4.5 billion, including the $592 garnered from their previous rounds.
Leading the pack for this round was the Alibaba Group out of China, with return investments from Google Inc. and Qualcomm Ventures. Newcomers included Warner Brothers, Fidelity Management and Research Company, Morgan Stanley, J.P. Morgan, and Andreessen Horowitz.
“Here at Magic Leap we are creating a new world where digital and physical realities seamlessly blend together to enable amazing new experiences. This investment will accelerate bringing our new Mixed Reality Lightfield™ experience to everyone,” said Rony Abovitz, Founder, President, and CEO of Magic Leap in his statement to the press.
Included in the news item was the addition of Alibaba’s Executive Vice Chairman Joe Tsai to Magic Leap’s board. “We believe Alibaba can both provide support to and learn from such a partner,” said Tsai in his statement to the press, adding that, “We look forward to working with the Magic Leap team.”
Founded in 2010 by Abovitz, the company is headquartered in Dania Beach, Florida. They also maintain offices in Los Angeles, Silicon Valley, Seattle, Austin, New Zealand, the U.K., and Israel.
What’s behind Magic Leap’s special sauce?
In September, Magic Leap offered the world a sneak peek at what they’ve been brewing up in their labs with a video showing how their technology combines the digital with the real world.
Beyond making it clear that they are looking to become a leader in the field of augmented reality, however, very little is known about the company’s intentions. They say that they are developing the next computing platform without indicating how it will be put into practice.
Their videos show the high level of design and detail that they have developed thus far, but for now, they have only shown them as parlour tricks.
Technologies like augmented reality and virtual reality have been gaining traction and attention not only from niche enthusiasts, but from corporates as well. Facebook put themselves in the VR game when they bought Oculus for $2 billion. Google has also been clear that it is interested in seeing these types of devices through to success, with their support of various initiatives on Android phones as a part of the Google Cardboard project.
The mind boggling sum that this company has been able to pull together could be the largest of its kind for a Series C. Even rounds like Uber’s Series C that received $361.2 million back in 2013 pale in comparison to this deal, so it begs the question as to what does Magic Leap have up their sleeve?
Magic Leap continues to keep the world in the dark as to how their product will be introduced to the market. The inclusion of players like Warner Brothers would seem to imply that there will be an entertainment angle here, but that could only be the cusp of the potential.
Even as a fan of the virtual reality experience, that technology has within it a number of inherent limitations. The user must be fully engaged as they are blocking out all other stimulus with the goal of tricking the body and brain to experience the content put before them. Certainly augmented reality can fill this role, but there is so much more to it. Since augmented reality is essentially the addition of digital layers on top of what we see with our own eyes, it means that we can actually interact with the world around us.
Having full use of our senses means that this technology can be used on the go, unlike virtual reality that demands we stay in a single location. Just imagine snowboarding down hill while playing a game to hit rings and score points, or touring around Rome with a guided tour where the sights and sounds of the ancient city come to life in front of your eyes. The potential here appears to be endless, even for more mundane activities like seeing directions through your glasses while driving so that you do not have to take your eyes off the road.
Lower amount than originally reported
The new partnership with Alibaba should also raise some eyebrows moving forward. While the Internet giant is a strong player in the Chinese market, their reach extends far further to other corners of the world, making them an ideal partner for distribution after the product begins production.
Abovitz implied that this could be a compelling reason for their coming on board when he stated that, “We are excited to welcome Alibaba as a strategic partner to help introduce Magic Leap’s breakthrough products to the over 400 million people on Alibaba’s platforms.”
This latest victory from the company, while still extremely impressive, falls short of the initial amount that had been reported from Forbes back in December, which cited the figure closer to $827 million. At this point it is unclear as to whether the initial report had been misreported or if part of the investment had fallen through.
With their fresh injection of funds, it would seem that Magic Leap is nearing production stage. So while the entirety of the technology and business worlds continue to wait with baited breath for hints from the secretive company, everyone is excited to see what they will conjure up when they finally unveil their finished product, hopefully as soon as this year.