(Bloomberg) -- Since the start of 2023, Saudi Arabia’s Public Investment Fund has injected $750 million into Magic Leap Inc. The 14-year-old augmented-reality company that’s still searching for a workable business model says it needs even more.
Magic Leap, which has raised at least $3.5 billion, said it needs additional funds later this month and again in January and June 2025 “to meet its obligations as they fall due,” according to a company report filed in the UK. The firm has a “realistic expectation” of getting the funding from an unnamed investor, according to the filing from its European operations.
The PIF became the majority owner of the startup in 2022. The sovereign wealth fund provided $590 million the following year and an additional $160 million so far in 2024, in exchange for convertible debt, according to Magic Leap’s UK filings. In recent years, PIF has invested heavily into gaming and sports as part of a push to develop an economy beyond oil wealth.
A representative for Magic Leap declined to comment. Representatives for the PIF didn’t respond to requests for comment.
Magic Leap, which was formed in 2010, was once heralded as a pioneer creating the future of computing. The Florida-based firm raised capital from investors including Alphabet Inc.’s Google, to build a consumer headset that could let wearers interact with digital objects in the physical world — a long-term ambition of Silicon Valley giants like Google and Apple Inc.
Its first augmented reality product, released in 2018, flopped. The company then slashed almost 80% of its workforce and pivoted to business applications. It recently cut another 75 jobs, eliminating its sales and marketing departments, to shift focus to licensing its tech, Bloomberg News reported in July.
In the UK filing, Magic Leap said it will seek additional funds in either equity investments or debt.
“However, there can be no certainty that these efforts will evolve into new investment funding,” the company said. Those uncertainties, the filing reads, “have cast significant doubt” on Magic Leap’s ability remain a “going concern.”
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