Magic Leap Will Take a Leap out of Existence in 2020

This was supposed to go in my Newsletter on breaking technology news, it's an error that it went to Stock Market News.

Cheers to unprofitable startups! Yet another Apple or Facebook acquisition target. One of the most controversial AR startups in recent memory, Magic Leap was founded by Rony Abovitz in 2010 and has raised $2.6 billion from a list of investors including Google and Alibaba Group.

This is very likely going to die in 2020, even as Apple is hiring many of their former employees. The end of Magic Leap’s mainstream mixed reality ambitions signals that we’ll be either be wearing Apple smart glasses, Google North and more likely, some Chinese iteration eventually.

Magic Leap represented the dream of mixed reality in a way that Microsoft's HoloLens never could. The Florida-based startup once seen as the future of at-home augmented reality. The company laid off about 1,000 employees, or half of its workforce in beginning in April. What's left to say?

According to an investigation of LinkedIn profiles by Protocol, many former Magic Leap employees have taken up residence at Silicon Valley’s most prominent tech companies, including Apple, Google, Facebook, Microsoft and Amazon. BigTech can scoop up talent at a discount, when hyped up startups finally do fail.

The lavishly funded augmented reality company still plans to turn all of its focus to the enterprise, though is more likely to be acquired very soon (likely before September, 2020). The bizarre leadership and endless risks VC took on this startup baffles me. “We are making very good progress in our healthcare, enterprise, and defense deals,” Abovitz wrote in May. “As these deals close, we will be able to announce them.”

 In spite of raising an eye-popping $2.6 billion across nine rounds, this startup will still fetch a considerable price tag though far less than if they had actually disrupted the future of AR. Talks with Facebook and medical goods giant Johnson & Johnson have apparently led nowhere. So who would want to buy this hype train of an AR startup?

Recently the startup accused Chi Xu, who left the company in 2016, of stealing its technology to build his own mixed-reality glasses and launch Beijing-based Nreal. Silicon Valley have failed to such a marked degree in AR, VR and mixed reality, we have to assume it will be China that aces this technology.

Magic Leap burned easily 50 million on a Month as of 2018. A month removed from the great purge of 2020, when on May 21st, the company laid off around 1,000 employees, the startup will be acquired one way or another or die in the vagaries of technology startup failures.

As Covid-19 is enveloping Florida this AR startup last valued at $6.4 billion, Magic Leap, is about to take a magic leap out of existence. We have to celebrate the the crazy ones. Unfortunately not all of them make it:

Investors in Magic Leap include such big names as Google, Saudi Arabia’s Public Investment Fund, Temasek, AT&T and Fidelity. Magic Leap won't fetch $10 Billion, it likely won't fetch even $3 Billion.

To quote the rudimentary logic of Tech Crunch, The whole economy is hurting due to coronavirus. Augmented Reality seems less interesting than virtual reality with people avoiding public places.

Enterprise mixed reality and work from home mixed reality is going to be huge. No one has proven a killer consumer use case for augmented reality eyewear that warrants an expensive and awkward-to-wear gadget, even as Facebook has lowered the form factor. The Future of VR is likely not to be a cash cow for companies like Facebook and Google, once thought to be leaders in the space.

Magic Leap has been able to secure extensive funding from major investors which has always been concerning. We’ve not reached out to Magic Leap for additional details as we believe Magic Leap is about to take its final leap out of existence.