For $450 million, the sovereign wealth fund of Saudi Arabia acquired the ownership of Magic Leap, a pioneer in augmented reality.
Aiming to give consumers the impression that they are fully engaged in the digital environment, the Florida-based business, founded in 2010 by Rony Abovitz, has spent billions building a headset that projects holograms onto the actual world.
“Our goal is to make our interactions with the metaverse a more natural extension of how we view and operate in the physical world,” stated CEO Peggy Johnson in a blog post.
The company was a hit at the 2016 Consumer Electronics Show, attracting excitement and ultimately more than $4 billion in funding from technology giants like Google and China’s Alibaba, as well as telecom giant AT&T, chip maker Qualcomm, colossal investment banks like JPMorgan and Morgan Stanley, and Hollywood.
At least one round of funding for Magic Leap in 2016 totaled $793.5 million, including participation from Warner Bros., a subsidiary of Time Warner. Saudi Arabia spearheaded another $400 million fundraising round for Magic Leap in 2018.
The special effects studio behind Peter Jackson’s ‘Lord of the Rings,’ Weta Workshop in New Zealand, collaborated with Magic Leap on games for the headset.
However, Magic Leap One, its initial iteration, which was released in 2018 and cost $2,300, was a failure. The launch of competing products like Facebook’s Oculus and HTC’s Vive headsets and their complicated design and high price prevented many users from embracing them.
In April 2020, amidst widespread lockdowns during the early stages of the pandemic, the corporation cut half of its approximately 2,000-person workforce. It declared at the time that it would reorganize and prioritize sales to enterprises.
With a more constrained focus, Magic Leap 2 launched on sale in September last year. The $3,299 headgear primarily targets customers in the industry. According to a survey, businesses frequently use it to visualize design or building projects or by medical practitioners to plan surgeries.
So far this year, Magic Leap has raised $150 million in investment and $300 million in debt, following a $500 million haul in 2021.
Public Investment Fund, the sovereign wealth fund of Saudi Arabia, acquired a stake in the company totaling more than 50%, giving it majority control. Four of the eight directors of the corporation may now be appointed to its board by it.
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