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Like many of us, Magic Leap had a tough 2020. Now, the AR startup is talking big about its plan to turn things around.
On Monday, the company announced a $500 million funding round, which puts Magic Leap at a “post-money valuation of roughly $2 billion,” according to its own release. It also introduced its brand-new AR headset, Magic Leap 2, which is slated to ship in 2022—though select customers are already beta-testing.
Context, please
In 2010, Magic Leap began its operations in stealth mode. Eight years after its founding—and after raising ~$2.6 billion from investors including Google, Alibaba, and a16z—the company debuted its first product in August 2018: a consumer AR headset.
Since then: Magic Leap has had its ups and downs, starting with the fact that it fell seriously short on its 100,000-headset sales goal in 2018—moving just ~6,000 units in the first six months, The Information reported. That likely contributed to its $40+ million/month burn rate that year.
- In 2020, Magic Leap laid off about half its employees, lost its CEO and cofounder, and looked to sell itself at a $10 billion price tag.
Then it decided to move away from consumer headsets and focus on enterprise clientele. The company’s new headset, Magic Leap 2, is aimed at corporate customers and use cases like training or collaboration between teams. The company did not respond to a request for comment.
Big picture: It’s a tough time to be a mixed-reality startup—especially if your clients are consumers. The consumer AR boom could be years away, and tech giants are in it for the long game with money to burn. That’s why we’re seeing companies like Magic Leap pivot to courting enterprise customers.