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Google Leads $542M Round in Virtual Reality Startup Magic Leap


As far back as I can remember we’ve been talking about the next generation of human-computer interface, one that seamlessly and visually merges the physical and virtual worlds in three dimensions. The 2D display we’re used to looking at -- from a tiny smartphone to a giant movie screen -- ceases to exist.

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There have been dozens, maybe hundreds of sci-fi movies and TV shows that used special effects to portray future worlds where people could intimately interact with computer-generated multimedia content as if they shared the same real space and time. That was only in science fiction … until now.

According to Magic Leap, a four-year-old South Florida-based startup that just raised one of the biggest rounds of venture capital in history, the future may be upon us in relatively short order. The nearly unprecedented $542 million round was led by Google (NASDAQ:GOOGL) and reportedly values the company at close to $2 billion -- the amount Facebook (NASDAQ:FB) paid to acquire virtual reality goggle-maker Oculus earlier this year.

Other investors include Kleiner Perkins, Andreessen Horowitz, Qualcomm Ventures, KKR, Legendary Entertainment (makers of Man of Steel, The Dark Knight Rises and Godzilla) and Vulcan Capital (Paul Allen’s venture firm). Google SVP Sundar Pichai will join Magic Leap’s board of directors while Qualcomm (NASDAQ:QCOM) executive chairman Paul Jacobs and another Google veep will join the board as observers.

Magic Leap’s founder and CEO, Rony Abovitz, is a biomedical engineer who sold his previous company, MAKO Surgical, to Stryker (NYSE:SYK) for $1.65 billion last year. His current company is headquartered in Dania Beach, Fla., near Miami and has about 100 employees.

While Abovitz calls Magic Leap’s technology “cinematic reality” to distinguish it from virtual or augmented reality, both of which have failed to deliver on their promise, to me, they’re one and the same. (In any case, the featured video on Magic Leap's site of a tiny elephant floating from a person's hands is a pretty exciting sight -- see for yourself.)

Magic Leap’s first product will be a lightweight wearable, perhaps not unlike Google Glass, that will essentially use infrared cameras to create a complete 360-degree, 3D awareness of the user, seamlessly integrate that with virtual images in real time, and project the combined images directly onto the users’ eyeballs. The wearable will do audio and video but the company plans to add touch and other senses down the road.

No wonder Google led the Series B round. This is what Glass should have been.

The only thing that really puzzles me about Magic Leap is the way nearly every article calls the company “mysterious.” That’s not how I would characterize it. Considering the company is in stealth mode, an awful lot is known about what it’s doing. Rather than mysterious, I think it appears to be so way ahead of where we are today that it’s undoable. And yet, it is being done.

At a recent talk in Santa Cruz, highly regarded game developer Graeme Devine -- formerly of Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT) and Ensemble Studios -- said that when Magic Leap first contacted him in February and showed him what they were doing, he said, “No, that is impossible. I know what is possible and impossible and that’s impossible. I’ll come to Florida and I will call you charlatans.”

Now he’s their chief creative officer and VP of Games, Apps and Cinematic Reality Experiences. Devine said, “We render a digital light field into the world and make objects appear that aren’t really there. Games are no longer on a two-dimensional screen. They’re no longer on an Xbox One underneath. Games are in the room.”

He says the technology they’re developing does away with screens. And it goes way beyond games. Indeed, the implications for movies, any type of computer or device interface, and human-to-human communications are far-reaching.

Magic Leap has a tight and long-standing relationship with Weta Workshop, the special effects company for “Avatar,” “The Hobbit,” “The Lord of the Rings,” “District 9” and “Elysium.” Abovitz says his company has a team working with Weta down in New Zealand and its co-founder, Academy Award winner Richard Taylor, sits on Magic Leap’s board.

Meanwhile, Legendary Pictures CEO Thomas Tull who personally invested in the round along with his company says the technology has to be seen to be fully understood. “It was incredibly natural and almost jarring -- you’re in the room, and there’s a dragon flying around, it’s jaw-dropping and I couldn’t get the smile off my face,” he said.

Sounds like the next big thing to me. Sounds like a real game-changer. And it’s not by Apple, Google or Facebook. How refreshing.

What do you think?

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