>Saudis take control of US augmented reality company Magic Leap

>^Kingdom's ^sovereign ^wealth ^fund ^takes ^more ^than ^50pc ^stake ^in ^the ^business

>^^By ^^Matthew ^^Field ^^26 ^^December ^^2022 ^^• ^^1:05pm

> Saudi Arabia has taken control of US augmented reality company Magic Leap, The Telegraph can reveal, as the company taps up investors for a further $450m.

> Magic Leap, which has raised more than $4bn in debt and equity funding but never turned a profit, has been developing a pair of goggles designed to impose virtual images across the real world.

> Despite raising funds from Google, China’s Alibaba and US telecoms giant AT&T, Magic Leap has struggled to turn its vision of high-tech digital glasses into reality. At one stage it was valued at more than $4bn.

> Founded in 2010 by US entrepreneur Rony Abovitz, the company made a splash in 2015 with a teaser for its augmented reality glasses that caused a surge in consumer interest in the company.

> Headquartered in Florida, Magic Leap partnered with New Zealand’s Weta Workshop, known for its motion capture work on the Lord of the Rings films, on games for its headset. Video games for its augmented reality goggles included Dr Grodborts Invaders, featuring the voice Stephen Fry.

> However, its product, the Magic Leap One, enjoyed only modest sales when it went on sale in 2018. The company cut more than 1,000 jobs during the pandemic.

> The headset's successor, the Magic Leap 2, went on sale in September this year in an effort to revive interest. The headset costs $3,299 and is mostly aimed at industry customers. The new headset is often used by businesses to visualise design or construction work or by medical professionals who can use the headset for surgical planning.

> According to delayed accounts for its European division, Magic Leap raised $150m in preferred convertible stock and $300m in debt “to date in 2022”. The funding has not previously been disclosed. It follows a $500m raise in 2021.

> During the course of its recent funding rounds, Saudi Arabia’s sovereign wealth fund, Public Investment Fund (PIF) took a stake of more than 50pc in the business, giving it overall majority control. The accounts said: “As of November 2022, the PIF is entitled to appoint four of the eight directors of the board of directors of Magic Leap."

> In August, it had $223m in cash and was continuing to seek further investment.

> Saudi Arabia previously led a $400m funding round for Magic Leap in 2018.

> Other tech companies are also spending billions of dollars trying to make augmented and virtual reality devices mainstream.

> Mark Zuckerberg rebranded Facebook as Meta last year and has unleashed tens of billions of dollars on “the metaverse”, a far-out concept to create a 3D internet using immerse virtual reality. Meta intends to spend 20pc of costs next year on the project.

> Meanwhile, iPhone-maker Apple is rumoured to be working on a pair of augmented reality glasses and a virtual reality headset, which could be revealed in 2023.

> Peggy Johnson, who became Magic Leap chief executive in 2021, said this month: “At Magic Leap, we believe that the metaverse is already here, with many currently experiencing a limited view via phones, computers, and tablets. Our goal is to make our interactions with the metaverse a more natural extension of how we view and operate in the physical world.”

> Magic Leap did not respond to requests for comment.