Miami — Magic Leap, the South Florida-based spatial computing startup, announced it has raised a $500 million round of funding at a $2 billion post-money valuation. This brings the company’s total funding to date to about $4 billion according to Pitchbook data.
The company also announced it will be launching the second iteration of its headset, Magic Leap 2, in 2022. While the company has succeeded in raising a lot of funds over the years, they’ve had a tough ride in terms of actual business.
What’s most notable about this raise is not it’s mammoth size, but the fact that the company’s valuation has not maintained its value over time. In 2014, Magic Leap raised $542 million also at a $2 billion valuation. In 2019, the company was valued at $6.7 billion. And here we are in 2021 returning to a $2 billion valuation. To say their investors have not fared well is an understatement.
In its early years - the company was founded in 2010 - it focused on creating a product for consumers, but even then it wasn’t until 2017 that they launched their first product, Magic Leap 1, a $2,300 headset that was a total flop. In 2020, just a week after raising another $350 million round, Rony Abovits, the company’s original founder and CEO announced that he was stepping down. They brought in Peggy Johnson, a former VP at Microsoft to take over the helm, and since then she’s been trying to pivot the company toward enterprise rather than consumers.
Previous investors include the likes of Google, Alibaba, Fidelity and Andreessen Horowitz, but mysteriously, the company decided not to disclose the investors in this round. We did however get a preview of their new product through a company tweet.