Business

We finally know what led investors to put $1.9 billion into secretive Magic Leap

Screen shot from Magic Leap website announcement of its new product, Dec. 20, 2017.
Screen shot from Magic Leap website announcement of its new product, Dec. 20, 2017.

South Florida’s secretive virtual reality wunderkind has finally revealed its long-anticipated technology — sort of.

On Wednesday, Broward-based Magic Leap unveiled Magic Leap One, a mixed-reality headset that allows wearers to see and interact with people and objects that aren’t in the room with them — but will appear as if they were. Unlike current virtual reality headsets that replace the experience of the physical setting, Magic Leap’s technology allows for experiences within the existing physical setting.

The version released Wednesday includes goggle-like headgear, called Lightwear, hooked to a pocket-sized Lightpack computer. It is aimed at digital creators “who could change how we experience the world,” according to the company’s website — to create interactive shopping, games and lifelike meet-ups between people in different physical spaces. (Think Star Trek’s hologram room, and you’re heading toward the right galaxy.)

The technology simulates 3-D images superimposed on the real world by projecting patterns of light to the eye.

According to the company’s digital release, the technology will ship in 2018, when the company led by local entrepreneur Rony Abovitz will also reveal a “Creator’s Portal.”

magicleap2
Screen shot from Magic Leap website announcement of its new product, Dec. 20, 2017.

Twitter was afire with pans and raves from tech fans who have waited three years for a glimpse of the mysterious product that has drawn $1.9 billion in investment from brands including Google and Alibaba.

“I’ve been waiting for @magicleap to make this announcement. Excited about getting my hands on the Magic Leap One,” wrote Sergio Aguirre.

“This will change everything!” posted robertogeek.

And from Brian Mogen, who dissed the Willy Wonka-esque goggles, “#1.9B in funding and all I got were these doofy glasses...was really hoping to hear that there was going to be a meaningful application with all this secrecy.”

Forbes magazine saw potential. “Essentially, this might just be the personalized buying machine of the future,” wrote Paul Armstrong.

Rolling Stone writer Brian Crecente was granted access to preview the technology for a story published Wednesday. Among his experiences was a visit with a floating robot. “The world around it still existed, but I couldn’t see through it. It was as if it had substance, volume, not at all a flat image.”

Other demonstrations involved launching digital screens into the space at will. Another involved the entrance of a digital woman. “The level of detail was impressive, though I wouldn’t mistake her for a real person…While she didn’t talk or react to what I was saying, she has the ability to… I noticed that when I moved or looked around, her eyes tracked mine.”

magicleap2
Screen shot from Magic Leap website announcement of its new product, Dec. 20, 2017.

Magic Leap’s road to launch has been paved with massive financing unprecedented for a company without a product, and the surrounding mystery led some observers to wonder if the technology actually existed.

At its core is Abovitz, who earned his engineering bachelor’s and master’s degrees at University of Miami in the mid-’90s. His participation in one of UM’s first biomedical engineering programs stirred his interest in developing technology for the human body, he has said. Before starting Magic Leap, Abovitz was co-founder of Mako Surgical, the South Florida medical robotics company that sold for $1.65 billion to Stryker in 2013.

Magic Leap was born in the proverbial and literal garage about six years ago. At a UM speech to alumni in 2015, Abovitz said a trip with music industry mogul Chris Blackwell to Blackwell’s GoldenEye resort in Jamaica in 2011 helped shape Abovitz’s idea for Magic Leap. He loved being out in the environment, not staring into the phone, and realized computing had to change. “That’s where the world becomes your new desktop. … We shouldn’t bend to technology, technology should bend to us.”

Four days after Magic Leap received its first “serious capital” from Google and other investors ($542 million plus $50 million earlier), Google executive Alan Eustace parachuted a record-setting 135,000+ feet from a balloon near the top of the stratosphere. Eustace had spent time at Magic Leap, and was one of the engineers who pushed for the funding. That was a message too: “For cool things to happen, you have to get out of your comfort zone,” said Abovitz, who took up his own challenge of becoming a javelin thrower on the UM team during his college years.

In 2015, when most companies aiming at augmented reality were still tethered to Silicon Valley, Magic Leap announced it would move its team to a 260,000-square-foot facility under construction in former Motorola facilities in Plantation. Local and state governments last year approved $9 million in economic incentives to create 725 jobs with an average salary of $100,000 by 2020.

“We are setting up our facility in Plantation. We’re hiring, and I currently expect that to be the primary hub of the company although we are setting up centers of excellence built around the U.S.,” Abovitz said then. “We really want the greatest brains in the world, creative and technical, and we are also going where these brains are and setting up these centers of excellence. Think of it as a core planet, which is here, and satellites around it.”

In January 2016, Magic Leap landed another milestone of historic proportions: The company raised $793.5 million in a new round of venture capital financing led by Chinese e-commerce giant Alibaba Group., the largest funding round of its kind at the time. And it valued the company, still without a product to show, at a whopping $5.4 billion.

“We want the digital world to bend to your physical life, your real emotional life as a person, and we don’t want you to bend to computers,” he said then. “We are forcing our technology to fit people’s lives the way it was before computing. I think of this as a conceptual computer, a computer based on context and awareness that will help you be more intelligent. It will make you smarter, not a machine, and it will deliver an Internet of presence and experience rather than just data.

“Computing today is like watching a shark on an iPhone, but when you are snorkeling you are experiencing it in the present, it is really there. We want to do that on the tech side,” added Abovitz, who grew up snorkeling and scuba diving in Florida. “We want this to bring you joy and emotion, experiences that you may never be able to have.”

This year has not been without its challenges. Magic Leap settled a trade secrets lawsuit with a pair of former employees. It also settled with a former employee who charged that Magic Leap fostered a corporate culture of “macho bullying” and that Abovitz ignored her requests to discuss her report about a gender diversity problem at the company, where just 3 percent of the engineers were women. It was also revealed that the company’s promotional videos were not authentic but had been enhanced. Some high-level management changes resulted.

Yet, in June, Abovitz appeared on the eMerge Americas stage, sharing his thoughts on the future of technology and his vision for more natural computing. “We’re trying to make science fiction real.”

To experience the world more naturally, “we’re trying to build a computer that acts like people, so you don’t have to look at your phone all the time,” said Abovitz, While Magic Leap coined the “mixed reality” description — somewhat akin to augmented reality — Abovitz has said he now prefers describing it as “spatial computing powered by a digital lightfield.” It will allow you to experience the world more naturally, he said. Goodbye tech neck.

Last spring, Abovitz said Magic Leap had more than 1,000 employees, with about 800 in South Florida. “We are bringing in people from all over the world. This brain trust will at some point spin out their own startups.”

Basing his company in Plantation allowed him to get away from “the noise and group think” of the West Coast and think clearly, he said at eMerge. He believes South Florida could become a hemispheric tech hub, something he didn’t feel when he was co-founding and growing Mako Surgical. “There is something going on — I feel it.”

In October, Magic Leap confirmed that it had raised another large funding round, $502 million on a valuation of $6 billion, bringing its total funding to $1.9 billion as it readied for blastoff.

“Starting a company is like doing 100 Iron Mans [competitions] in a row,” Abovitz told the UM audience in 2015. “Don’t do it if it is not rocking, if it’s not awesome.”

  Comments