Magic Leap CEO Rony Abovitz confirmed he has raised a new round of funding, and he also said that he will step down as the augmented reality company’s top executive.
In a statement, Abovitz confirmed rumors that the company had raised a last-minute round of funding, but he didn’t say where it came from and he didn’t say the amount raised. The company is pivoting to focus its spatial computing platform on the enterprise market.
A week ago, The Information reported that Magic Leap had raised $350 million as a lifeline, just after the company announced it was cutting 1,000 jobs and exiting the consumer business for its Magic Leap One AR headset, which overlays animated images on the real world.
In some respects, it’s not a surprise to see Abovitz saying he will step down after the company finds a new CEO. Many companies outgrow their founders, and Magic Leap hasn’t fulfilled its original vision of transforming our world with AR glasses. The company tried to make both consumer and enterprise products succeed at the same time. But the consumer market balked at Magic Leap’s expensive product, selling for at least $2,000. And the big enterprise orders didn’t materialize for a technology that seemed like it was still a work in progress.
Magic Leap’s plan to focus on the enterprise is probably the right strategy, as companies are more likely than consumers to make a bet on high-end technology. But there’s a lot of competition and it won’t be easy to convince customers that Magic Leap will pull off a miracle after whiffing on its first attempt. As with virtual reality companies, Magic Leap may have to hunker down and be prepared for the idea that the revolution won’t be fast. That may be the kind of thing the new CEO will have to think about.
Abovitz is to be applauded for the vision that got the company to its valuation in the billions of dollars. But it is probably a good time to find someone who can make a business out of all of that value.
Here’s Abovitz’s full statement:
As we’ve shared over the last several weeks, in order to set Magic Leap on a course for success, we have pivoted to focus on delivering a spatial computing platform for enterprise.
We have closed significant new funding and have very positive momentum towards closing key strategic enterprise partnerships.
As the board and I planned the changes we made and what Magic Leap needs for this next focused phase, it became clear to us that a change in my role was a natural next step. I discussed this with the board and we have agreed that now is the time to bring in a new CEO who can help us to commercialize our focused plan for spatial computing in enterprise. We have been actively recruiting candidates for this role and I look forward to sharing more soon.
I have been leading Magic Leap since 2011 (starting in my garage). We have created a new field. A new medium. And together we have defined the future of computing. I am amazed at everything we have built and look forward to everything Magic Leap will create in the decades to come.
I will remain our CEO through the transition and am in discussions with the board with regards to how I will continue to provide strategy and vision from a board level. I remain super excited about Magic Leap’s future and believe deeply in our team and all of their incredible talent and capabilities.