Magic Leap announced on Wednesday that it has raised $461 million from Saudi Arabia’s sovereign investment arm, The Public Investment Fund and the news gave rise to a lot of speculation as the VR company hasn’t released a single product yet.
The investment brought Magic Leap’s total funding to more than $2.3 billion with Google, Alibaba and Morgan Stanley already being investors. The company is now valued at more than $6 billion.
“The Magic Leap team and I are happy to welcome the Public Investment Fund and the other new investors to the Magic Leap family. We look forward to having them join us on our journey to build an amazing future,” Rony Abovitz said in a press release.
$400 million was actually funded by PIF while the rest was fronted by “new investors”, according to the company.
This is an additional Series D funding that comes months after the startup confirmed raising $502 in a round led by Temasek back in October. The Florida-based startup has raised a total of $963 million in Series D funding.
So, the question everybody has been asking. Why does Magic Leap need this huge amount of investment?
It seems like Magic Leap is a huge fan of secrecy, the only thing the company has done publicly is raising money. The company had remained silent for a long long time until last December when it finally unveiled details about its highly-anticipated AR goggles, the Magic Leap One. However, the product hasn’t yet been released so it means Magic Leap has now got more money for a product that has already taken a lot of time to step out.
Another reason that Magic Leap requires so much money might be the fact that the hardware they are trying to build has not been built before, so they need to build everything from the start. The company has also spent a lot of resources into developing new display technologies and sensor suits. They are also building operating systems specific to its platform.
The company has not yet confirmed if it will utilize the recent funding to improve its already developed product or work on new ideas.
It’s just because of the high profile investors that they have been able to raise more and more money without having to release a single product. Let’s see if the next public announcement from the company is the release of Magic Leap One or just another funding round.