Magic Leap in talks for $400-M Saudi cash injection
Saudi Arabia’s sovereign wealth fund is in talks to invest as much as $400 million in Magic Leap in a deal that would take the US tech start-up’s total fund-raising to $2.3 billion, even though its augmented reality glasses have yet to go on sale.
The deal between Saudi Arabia’s Public Investment Fund (PIF) and Florida-based Magic Leap is expected to be unveiled in the coming weeks, according to people close to the discussions.
The new financing is an extension to Magic Leap’s $502-million funding round, announced in October, which was led by Singaporean investment fund Temasek.
The Saudi investment would be at the same valuation of around $6 billion, these people said, adding PIF to Magic Leap’s high-profile roster of investors including Alibaba, Google and Fidelity.
Magic Leap declined to comment. The PIF did not respond to a request for comment.
Magic Leap’s “mixed reality” glasses feature what it calls digital lightfield technology and an advanced array of sensors to place virtual objects in specific positions in the real world. But it has shown few people its planned “mixed reality” headset, which has already been in development for almost eight years, and it has generated skepticism in some quarters of Silicon Valley.
Talks with PIF are ongoing and there is no guarantee a deal will be finalized. If completed, it would mark the second highprofile investment in the US technology industry by PIF following its 2016 injection of $3.5 billion into Uber.
The $230-billion wealth fund has been at the center of Crown Prince Mohammed bin Salman‘s effort to diversify the kingdom’s economy away from oil.
Its Uber deal valued the ridehailing service at $62.5 billion but came just months before Uber skidded into a series of scandals, ultimately leading to the departure of chief executive Travis Kalanick.
Subsequent to that deal, PIF became the principal backer of a $93-billion investment fund managed by Japan’s SoftBank, which was created to allow SoftBank founder Masayoshi Son to make large bets on technology companies. Many interpreted the $45-billion sum put into the SoftBank Vision Fund as a sign that the kingdom decided that it was better suited to navigating the technology sector with an experienced entrepreneur. But a deal directly with Magic Leap would upend that logic.
Investors say that the scale of Magic Leap’s fund- raising, unprecedented for a private tech company before its