While Apple’s device will be tough to compete with, Magic Leap has a slight pricing edge, with a price of $3,300 versus Apple’s $3,500 device. But it is interesting that Saudi Arabia’s Public Investment Fund, which is already the majority owner of Magic Leap, wants to double down on the investment. (The investment date was in November). To date, Florida-based Magic Leap has raised $4.5 billion.
Magic Leap’s founder, Rony Abovitz, stepped down from the CEO job in 2020. Peggy Johnson succeeded him and then she was recently replaced by Rosenberg, a former Bain Capital executive. I spoke with Rosenburg, who talked about the vision for solving customer problems, and Diez, who has been there for some time, answered questions related relating to Magic Leap’s tech and history.
Florida-based augmented reality (AR) startup Magic Leap has raised an astounding $4.5 billion in funding over its 10+ year history, with one of the most recent investments coming from Saudi Arabia's sovereign wealth fund totalling $400 million. For a company that has yet to release a mainstream consumer product, this level of financial backing is remarkable. However, as an outside observer, one has to wonder - where has all that money gone, and what does Magic Leap have to show for it?
Founded in 2010, Magic Leap operates in an aura of intense secrecy and makes lofty promises about groundbreaking augmented reality technology that would change the world. Its early concept videos showcased interactive holograms integrated into real-world environments, hinting at the potential for entertainment, design, communication and more. This vision and the credentials of founder Rony Abovitz were enough to attract investments from companies like Google, Alibaba and AT&T, as well as backing from prominent VC firms.
And yet?
And yet, here we are in 2024, and the only product Magic Leap has put out is the Magic Leap One Creator Edition, sold at the steep price of $2,300. While advanced for its time, this developer kit had major shortcomings in fields of view, image quality and overall functionality. It's safe to say it bore little resemblance to those exciting concept videos. With the AR market now heating up, Magic Leap has become irrelevant before ever releasing a real commercial offering.
Where did all that investment money go? With no public revenue or customers to speak of, one has to assume a huge chunk went towards R&D and secretly paying the salaries of a growing employee base now over 1,000 strong. While Magic Leap continues to promise big breakthroughs are coming, it's time for this overvalued startup to finally deliver on all those years of hype and lofty promises. The AR industry is rapidly evolving, with Apple releasing its own high-end AR/VR headset and companies like Meta and Microsoft pushing advanced offerings.
Magic Leap and founder Abovitz talk a big game when it comes to world-changing technology but have little actual innovation to show the public after all this time. Unless they can roll out some truly amazing capabilities soon, Magic Leap risks becoming one of the biggest failures in startup history - an overpromised pipe dream that ends up squandering nearly $5 billion in investment funds. The clock is ticking as 2024 promises to be a pivotal year for AR/VR. It's time for Magic Leap to put up or shut up.
