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Magic Leap looking to raise at a $6B valuation
- adventured 9y agoThe only thing missing at this point is an ICO for an AR coin from Magic Leap. You know, to just really drive it home.
- oscilloscope 9y agoThat would put Magic Leap somewhere between Litecoin and Bitcoin Cash in their crypto market cap.
- godzillabrennus 9y agoMagic Cards were successful... so maybe the coins will blow us all away...??
- beager 9y agoHave any other companies raised at this valuation pre-product, much less pre-market fit? Where does this value come from? Have they booked even 1% of that valuation in sales, or is it all speculative? And I'm baffled in light of the space (AR), where I feel like there are a lot of high profile players and fast movers. Not delivering seems incredibly untenable.
- jmcgough 9y agoI'm skeptical, but the Magic Leap engineers I've met have been really confident that their tech is going to be a game changer (and of course wouldn't tell me anything about it ;)). Guess we'll see when they show their product publicly - it's weird that they've decided to stay stealth for this long.
- beager 9y agoI would give them the benefit of the doubt, but still, confidence does not a six billion dollar valuation make.
- objclxt 9y ago> the Magic Leap engineers I've met have been really confident that their tech is going to be a game changer Sure, but I'm sure there were engineers at Theranos who thought their tech was going to be a game-changer as well. Being confident in a product doesn't mean the product is actually any good. > Not delivering seems incredibly untenable. I would happily place a bet they will never deliver, or if they do deliver it ends up being lackluster and nowhere near what they originally promised. They showed a demo video two years ago (that turned out to not actually be a demo), and haven't released anything since. Technology does not stand still in that time: in 2015, the iPhone had a single rear and front-facing camera. Soon you'll be able to buy one with stereographic rear cameras and a dot-projection IR depth mapper on the front, with what is from all accounts an extremely good AR software framework. Oculus, Apple, and Google aren't just twiddling their thumbs waiting for Magic Leap to release a product. They are actively putting money into R&D, and shipping iteratively. Apple's going to have real-world AR experience and feedback from iOS 11 and the iPhone X that Magic Leap won't have. I'd love to be wrong - it'd be great to have another player in the space, and maybe their tech is awesome. But if you look at what everyone else is doing compared to what they've released...it doesn't look good.
- apersona 9y agoYeah except Google is one of the backers. If one of the companies actively working on R&D is backing it, isn't that saying something?
- Judgmentality 9y agoGoogle Ventures is legally distinct from Google. And Google Ventures is actually a mediocre venture firm based on their history.
- gumby 9y agoGoogle Ventures passed on Magic Leap but Sergey liked it so produced an investment directly from Google's balance sheet.
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- seattleeng 9y agoHave you spoken to current or former engineers? I have spoken to a few former engineers, and the responses ranged from neutral to negative on the prospects of the product appeal of the tech. Obviously both groups will be biased in their own way. My own impression is that the stealthiness comes from the lack of a quality deliverable, and not a holdout of some mind-blowing reveal.
- Nition 9y agoI thought maybe Skycar since it spans 40+ years, but even they've apparently "only" spent 100 million (although inflation adjustment would boost it a bit).
- dogruck 9y agoWow thanks for the TIL Skycar. https://en.m.wikipedia.org/wiki/Moller_M400_Skycar https://en.m.wikipedia.org/wiki/Moller_M400_Skycar
- ingenieros 9y agoTheranos is the only other one that comes to mind and we all know how that played out.
- hkmurakami 9y agoTrilogy Systems perhaps. (It seems they IPO'ed pre-product? Someone on this forum was probably around when this happened.) Trilogy Systems Corporation was a computer systems company started in 1980. Originally called ACSYS, the company was founded by Gene Amdahl, his son Carl Amdahl[1] and Clifford Madden. Flush with the success of his previous company, Amdahl Corporation, Gene Amdahl was able to raise $230 million for his new venture. Trilogy was the most well funded start-up company up till that point in Silicon Valley history. It had corporate support from Groupe Bull, Digital Equipment Corporation, Unisys, Sperry Rand and others. The plan was to use extremely advanced semiconductor manufacturing techniques to build an IBM compatible mainframe computer that was both cheaper and more powerful than existing systems from IBM and Amdahl Corporation. ... In 1983, the company had an initial public offering and raised $60 million. By mid-1984, the company decided it was too difficult to manufacture their computer design. Gene Amdahl stepped down as CEO and Henry Montgomery was brought in as replacement. https://en.wikipedia.org/wiki/Trilogy_Systems https://en.wikipedia.org/wiki/Trilogy_Systems
- cm2012 9y agoThere has to be a lot of really dumb people at venture capital companies if it turns out magic leap has no real tech. Which, given the Theranos debacle, is very possible.
- mevile 9y agoIt's all about who's on their board and who they've raised money from. If they have relevant industry expertise on their board and have raised money from smart investors like sequoia they probably have real tech. If they have bunch of dumb money and people who bring nothing technical to the board they're more likely to be another Theranos. Not having medical and science expertise and raising dumb money was part of Theranos' problem. Having said that Magic Leap's investors are Google, Andreessen Horowitz and Qualcom. The board is comprised of Google's CEO and Qualcom's executive chairman. That's all very impressive in my opinion.
- bobsil1 9y agoThe amount of your prior exit (Rony's $1.65B) ≈ amount you can raise for next (Magic Leap) :)
- pharrington 9y agoVC investors are just as human as you and me. Manipulating people into parting with their social-economic power is essentially a solved problem. What Magic Leap says their gonna sell isn't.
- kowdermeister 9y agoOr the alternative is that they've seen things we haven't. Who would miss the opportunity to build the next Apple?
- alexasmyths 9y agoThey have 'real tech' - the issue is how marketable and productizable it is. This is an old, old issue in tech investing. Sometimes companies have amazing demos - but the ability to make a product is limited, or the market potential is limited. That this money is coming from far-away, is not a good sign. If they were truly hot, then the 'good firms' would be lining up. I loathe to use the term 'dumb money' but there is a lot of it flooding into the US as of late - a similar thing was happening during the 2000 bubble, but this might be more sustainable as before it was regular money from overseas, or from big-boston firms - but now - the money coming in from Asia is sustainable. All that money we send for cheap stuff has to come back and find a home somewhere. And 'dumb' is a relative/unfair term as well - for some investors, it makes much more sense to take on higher risk than others as their personal needs and opportunity are different. If you have $1B sitting in a fund and nowhere to put it, and your local government can come along and snatch it up at any time either through currency dilution or appropriation - well - all of a sudden a slightly-risky investment in Magic Leap makes much more sense than it would to say, Anderseen Horowitz.
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- res0nat0r 9y agoUnless this company comes out with a public demo showing their product minus any obfuscation you have to be a massive sucker to buy into this. Maybe this will be better than Segway and Theranos combined?
- godelski 9y agoThey keep talking about a sunglasses size product. Is even such a thing possible? I understand they are using vectored graphics, and I can't imagine you could create an immersive world within a sunglasses sized computational unit, unless they have massive compression and crazy hardware. But can you pass that data wirelessly? Can BlueTooth 5 handle the necessary traffic?
- strangeloops85 9y agoLast report I read mentioned two waist-mounted units for computing and battery that would be linked up to the sunglass-sized product (presumably by wires). I'm sure they have made some good technical advances. But the fact that it's taken this long to productize it to something people can try is.. not promising. Given their burn rate they really need the first product to have substantial market traction to sustain such valuations and keep moving. That's challenging to say the least..
- 6nf 9y agoMore details here: https://gpuofthebrain.com/blog/2016/7/22/how-magic-leap-will-work https://gpuofthebrain.com/blog/2016/7/22/how-magic-leap-will...
- knowaveragejoe 9y agoIt's worth noting that this is some guys educated speculation on the matter. Nobody knows how this will actually work without signing an NDA at this time.
- aresant 9y agoApple's ARKit release has opened many people's eyes to the potential of AR as the true nextgen platform. Made possible by apples truly vertically integrated hardware/software biz. Especially in comparison to goog with their stillborn Project Tango due to the huge android platform fragmentation. So how is a magic leap worth $6b? Consider that Android generated in excess of $31billion in revenue by Jan '16(1). Having a "killer app" to capture market share in the coming AR consumer platform wars is easily worth that price of admission and if ML pulls it off $6b will look cheap. https://www.bloomberg.com/news/articles/2016-01-21/google-s-android-generates-31-billion-revenue-oracle-says-ijor8hvt https://www.bloomberg.com/news/articles/2016-01-21/google-s-...
- kayoone 9y agoI think you missed googles recent announcement for ARCore. They seem not that far off as it will also work on older phones to some extent.
- tigershark 9y agoI don't think so. AR kit to work effectively needs carefully factory calibrated cameras for SLAM, cheap android phones will always offer a subpar experience.
- sjcsjc 9y agoAs correctly predicted by Taek eight days ago https://news.ycombinator.com/item?id=15175635 https://news.ycombinator.com/item?id=15175635
- 6nf 9y agoSo they previously raised a BILLION dollars. Why are they raising more? I can't imagine this company spending a billion dollars in only a couple of years considering they're not even shipping anything yet.
- rl3 9y agoBecause cutting-edge hardware is expensive as hell to develop. For example, Nvidia's R&D budget spend for just their Tesla architecture was $3B.
- rgbrenner 9y agoThis company is now 7 years old and has no product. Total raised: $1.39B[0]. The last round was almost $800M in Feb. This $500M will bring the total to $1.9B. Truly amazing. 0. https://www.crunchbase.com/organization/magic-leap#/entity https://www.crunchbase.com/organization/magic-leap#/entity
- tryingagainbro 9y agoThey must know something we don't or there's so much money laying around, so a certain % goes into trash. For the company it makes sense to have as much cash a possible, not even blue chip companies could raise cash in 2008. 2008 is due to make a comeback IMO, in some form.
- api 9y agoThen why is it so damn hard to raise anything when you have a product that works and traction? Of course reality always pales in comparison to what might lie behind door number two.
- tryingagainbro 9y agoPotential maybe? This market might bring an iPhone-like revolution
- sprafa 9y agoPatents alone probably make the valuation
- Fricken 9y agoThere's a lot of 'lol, vaporware' type comments about Magic Leap, but taking some new fangled hardware from a crude proof of concept in a lab to the mass market in 7 or 8 years actually sounds like an ambitious timeline to me. These things usually take a long time. They also often end up going nowhere, which is why it's really surprising to see how much capital is being gambled. All the hardware that went into the first iPhone (the last really breathtaking consumer gadget) was decades in the making, with many iterative intermediate steps along the way. Attempting to go from 0 to 60 in one product cycle is kind of crazy, but I'm not sure how else you would do it this day and age with expectations being so high, there's no room for anything half baked. Either you make the leap or you don't. I would totally pay $2k for ar glasses that live up to the hype, though even under the best of circumstances, I don't expect Magic Leap to be living up to any hype for several more years.
- InTheArena 9y agoSo the new Apple iPhone X has a front sensor that can generate depth maps, and a rear-sensor that does even more sophisticated depth mapping. They also have a CPU that is as powerful as anything you get in Desktop PCs. So tell me, what's to keep someone from using the depth information on the front camera, using a Google Dream VR setup (but instead of covering the back of the iphone, use that sensor for the world around them) and then projecting poor man's AR with today's world. If the answer is wrong sensors, they can fix that next year, and do it at a size and a scale that no one else can touch. You just took a hardware problem, and made it a software problem. The fact that Peter Jackson has evidently jumped ship to ARKit is a pretty big sign that Apple is going to get there first. Apple's focus on ML on the phone directly, not requiring a server at the RTT latency is perfect for this application. They have hardware no one can touch, and do full stack miniaturization like no one else. Plus they also attract "lifestyle" buyers.
- abritinthebay 9y agoTend to agree. The big problem no-one has solved is the glasses/immersive aspect. Hololens is close, but the kit is waaaay to bulky still (and low FoV, not bad tho). In a few years tho... some kind of ARKit accessory will absolutely kill in this space.
- Geee 9y agoYup. Apple's depth sensor + ML can be also used as pretty powerful 3D hand gesture mapper. Better than Leap Motion I would guess. Also, switching to OLED allows low persistence. Their new custom GPU and custom video encoder on iPhone 8/X might even allow them to do ultra-low-latency AR pipeline. It's coming it's for sure.
- knowaveragejoe 9y ago> They also have a CPU that is as powerful as anything you get in Desktop PCs. Is this actually true?
- dmcy22 9y agoYes it is, at least when using Geekbench as a measure. The A11 beats some of the Intel processors in the 2017 MacBook Pro models. https://www.macrumors.com/2017/09/13/a11-bionic-chip-geekbench-scores/ https://www.macrumors.com/2017/09/13/a11-bionic-chip-geekben...
- mirimir 9y ago> All we have seen are a slew of videos “shot directly through Magic Leap technology” that give a sense of what is possible with a football helmet-sized rig, but perhaps not in their final consumer product which the company believes will be sized like a pair of sport sunglasses. From "football helmet-sized rig" to "sport sunglasses" is a huge leap (ha ha). Is that much miniaturization plausible within a few years?
- tonystubblebine 9y agoThe contrarian in me is wondering what would make this feel like a safe bet from an investor's perspective? For example, what is the value of the patent portfolio they are putting together by being first to most technical challenges?
- jorgemf 9y agoThe Magic Leap is investors putting so much money in a 7 year old company without a product. Even considering they have now a game changer product, what did they have 5 years ago to make investors put money on them? This is technology, who the hell put money in technology as a bet for more than 3 years in the future?
- tigershark 9y agoThey had a prototype much much bigger than the current PEQ and as far as I know every investor before putting money tried it and was blown away by the experience.
- jorgemf 9y agoWhat is a PEQ?
- tigershark 9y agoProduct EQuivalent: https://www.magicleap.com/#/blog/why-creativity-matters https://www.magicleap.com/#/blog/why-creativity-matters It's an advanced prototype of the finished product that has been presented to the investors for the first time this February as far as I know.
- yborg 9y ago7 years, $1.4B in funding. What are the odds that they are, you know, just a mere $500 million from showing a multiple on all that cash?
- dogruck 9y agoMagic Leap somehow feels less sketchy than Theranos for some reason. Definitely have my popcorn out though. It's almost comforting to read about negative to neutral gossip from ex-engineers.
- smegel 9y ago> Sources also told Bloomberg that Magic Leap will likely begin shipping devices For $6B I would hope you would use a stronger word than "likely". Such as "definitely".
- jonny_eh 9y agoI would have said that 4 years ago, when they were 3 years in.
- rburhum 9y agoIt is going to require a magic leap for that company to ship anything! Sorry, could not resist...
- amrrs 9y agoWouldn't be surprised if Apple R&D is also working on AR Glasses considering their ambitious attempt in making AR the big in the newly launched iPhones. In fact they need a new product for masses just like their iPhone. That must be a day when Magic Leap could face the fate of Blackberry or Pebble!
- dnh44 9y agoI believe they are working with Zeiss in that field.
- paul7986 9y agoDo AR Glasses or contact lenses exist yet? They act like normal glasses or contacts (prescription or not) until you use voice controls to view info and such.
- aorloff 9y agoAnd really, who isn't looking to raise at a $6B valuation that hasn't released a product yet ?
- lwansbrough 9y agoSeeing that Apple has packed so much into the top of the iPhone X gives me some hope for Magic Leap. I'm not a proponent nor a skeptic of their business, but I'm familiar with the space. The technology has to be undeniably the most advanced thing ever created in order to succeed. Look at HoloLens. Truly incredible technology with lots of potential. But the UX isn't great and the form factor is a showstopper for every day use. Microsoft has opted to cancel their second iteration in favour of the third. Perhaps we'll see a magic leap then, from them, before Magic Leap. It appears as though the technology is there to get near the form factor of glasses. If you tethered the glasses to a phone sized device in my pocket, that's good enough. I suspect that's what MS is working on now, and I suspect that's Magic Leap's goal. What remains to be seen is how these companies can adapt their technology to interface better with humans. When you're using a computer, you sort of forget you're using a mouse. When you're using HoloLens, you're painfully aware of the input mechanisms - they leave a lot to be desired, and are in no way immersive. That's the other 99% of this problem for these companies. Holograms are one hard problem. But there are at least two. You have to make it useable. It needs to fall away from your consciousness when you use it. VR is easier in that regard, and when it comes to user interfacing, VR still falls flat on its face. VR sucks. Make it work and not look dorky, and make it easy to use and you'll kill cellphones.
- aaron695 9y agoIs there anyway to bet AGAINST it? Can you buy some sort of put option on Magic Leap? I guess like all bubbles/crazy tech you can know they are there, but unless you know exactly when they are going to pop, it's not to useful. This is going to be a solid fail once they start selling the tech and everyone catches on. How could one go about betting against?