This Google-backed augmented reality company pulls out a massive funding round without revealing their product. Still, this is what we imagine they may release
It was reported on Wednesday that augmented reality wizards Magic Leap had succeeded in raising a whopping $827 million in their latest funding. At this point, the identity of the investors is unknown, with the story that was broken by Forbes emanating from a filing in Delaware.
This massive funding round comes nearly a year after the company raised $542 million Series B in October 2014. At the time, Google led the charge, with recently appointed Google CEO Sundar Pinchai joining Magic Leap’s board of directors.
Following this round, the company is believed to have garnered a valuation of $3.7 billion, taking into account the $1.4 billion raised in funding as well as other factors such as shares and options.
Forbes is reporting that with the new round, an additional seat will open up on the board, supposedly for the leader of the Series C. There are unconfirmed reports that China’s Alibaba has contributed a $200 million stake to the Magic Leap effort, but it is unclear if even that amount would put them in the running for the newest board position.
Why might this company be so magical?
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.
However beyond making it clear that they are looking to become a leader in the field of augmented reality, very little is known about the company’s intentions. 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.
Augmented reality as a concept has a wide range of potential uses. Beyond games and entertainment, it can be used in commerce for users to see themselves in a new outfit or try out a product, taking their imagination to the next level.
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.
Flying in stealth mode
What is unclear at this point is where this technology is leading up to. While it could easily find purposes in industrial design and health, there are likely to be other enterprise solutions where it could fit in as well. That said, due to the large influx of capital from investors who have a keen understanding of the consumer facing market, the safe guess would appear to be that they are setting their sights on integrating the technology into a range of consumer products. The investments in Magic Leap show a level of seriousness that feels more intense than the efforts going into virtual reality, a technology that many believe will be the leader in the race for eyeballs.
Google’s first attempt at augmented reality failed to gain traction, with Google Glass drawing outrage from many in the public who either did not appreciate being filmed by the device, or thought that the users looked ungainly in the bulky frames. However their investment in Magic Leap shows that the company has hardly given up on the idea and is willing to put down significant money to back it up.
It is also worth considering that Magic Leap may not go to market with their own device: Rather, it may be the source of technology that they could later license out to others, leading the charge in an augmented reality revolution.
This has officially been the week of companies who should be very public with their ideas somehow managing to stay under the radar. When the P2P insurance company Lemonade declared that they had closed $13 million during their seed round, like Magic Leap, they revealed very little about what they are planning to offer when they make their big reveal down the road.
Magic Leap has attracted an impressive following of investors who are ensorcelled with their technology, even before seeing a product that is ready to go to market. Beyond the potential value of their product which is untested in the market, investors are likely basing their bet on the quality of the team behind the technology.
By many standards, these types of investments come mostly when there is both a solid team and a concept with the capacity to upend how we relate to each other and with technology. The possible implications for altered realities that can change the way we shop, communicate, and perceive the world are enormous, to say the least.