Once valued at $8 billion, sources say the AR start-up is now seeking an acquirer.
Magic Leap is reportedly working closely with a financial advisor on exploring options to keep the doors of the AR startup open. According to a recent Bloomberg report, the AR company would either form a new partnership that would hand over the equity of the company or possibly sell off a significant stake of the company ahead of listing.
If sold, Magic Leap could potentially receive more than $10 billion according to an unidentified source.
The Florida based AR company jumped on every tech nerds radar when they raised over $1.4 billion in 2015; companies such as Google and Alibaba Group were among those that backed the startup, making their post-money valuation around roughly $3.7 billion.
Back in 2015, Magic Leap released a teaser video showcasing what owners of the Magic Leap One headset could expect out of the experience. The visuals and actions shown were nothing short of stunning, leaving viewers foaming at the mouths for more information.
But then things got weird. During a live stream, viewers were promised their first look at the Magic Leap One operating in real-time. Instead, the company failed to show any real footage and withheld information on the specs of the device. It was also uncovered that the above-mentioned video, as well as several others, were actually fake, with Magic Leap eventually caving in and admitting they were made using a special effects team.
Unfortunately, when developers and AR enthusiasts finally got their headsets, the Magic Leap One Creator Edition, put simply, failed to live up to the hype.
This did little to discourage Magic Leap, however. The company forged ahead and eventually delivered some really impressive AR experiences. So impressive that the US Navy began employing Magic Leap headsets to keep soldiers combat-ready while at sea.
This isn’t the first time there have been rumblings of Magic Leap being in trouble. In 2019 it was reported that Magic Leap only sold 6,000 AR headsets compared to their original goal of 100,000 headsets, while another report stated the company had signed over 2,000 patents as collateral to JP Morgan bank.
To make matters worse, Magic Leap laid off a number of employees followed by two executives leaving the company. They announced they were two long years away from their next-generation headset. But again, the company reassured investors that this ebb and flow was natural for any company their size.
Now in 2020 with these new reports of Magic Leap being back on shaky ground reemerge making everyone wonder if there is a future for the company, Chief product officer, Omar Khan told Bloomberg Technology host, Emily Chang, that the Magic Leap 2 would be out next year saying, “we’re actually building a technology for all-day, every day, and everyone.”
At one point during the interview, Chang calls out Magic Leap on their video of a whale bursting out of the gym floor and the AR experience with the elephant in your hands, saying, “we haven’t seen that yet.”
With both Facebook and Apple supposedly in development of their own proprietary AR headsets, it’ll be interesting to see how, or if, Magic Leap adjusts to this changing climate.
Feature Image Credit: Magic Leap