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.