Bankrolling the 10 Breakthrough Technologies: Magic Leap
Abovitz founded Magic Leap in 2010, and it became his full-time gig in December 2013 after he sold his previous business, the medical-device maker MAKO Surgical, for $1.65 billion. Nagraj Kashyap, senior vice president at Qualcomm Ventures, attributes much of his firm’s enthusiasm for Magic Leap to Abovitz’s track record building successful technologies and cultures. But he also sees good reason to believe that Magic Leap’s technology will create something new, a “pervasive and persistent” form of augmented reality.
Although virtual reality is not new, investors have been drawn back to it because of a substantial decrease in costs. Virtual-reality headsets that existed 20 years ago cost $20,000 to make, says Philip Rosedale, creator of Second Life and High Fidelity. Because it was so expensive, he says, “virtual reality in general has been a dream always five years in the future.”
In contrast, today “90 percent of the hardware in a virtual-reality headset is already in a cell phone,” says Nabeel Hyatt, a partner at Spark Capital, the original backer of Oculus VR, the virtual-reality headset maker Facebook bought in 2014 for $2 billion.
Spark Capital professes to like investing in markets so new their size can’t yet be determined. Even so, Hyatt says his firm believes the augmented reality of Magic Leap is still too far off to warrant investment. Significant technological puzzles still have to be solved in computer vision, 3-D rendering, strategies for mapping a room in real time, and other areas, Hyatt argues. “I am bullish on that,” he says, “but over the very long term.”
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