Is more than $2.6bn of funding enough to insulate a tech startup from the impact of the Covid-19 pandemic? Not in the case of augmented-reality firm Magic Leap. “The recent changes to the economic environment have decreased availability of capital and the appetite for longer term investments. While our leadership team, board, and investors still believe in the long-term potential of our IP, the near-term revenue opportunities are currently concentrated on the enterprise side,” explained a blog post from the company yesterday. That signifies a move away, for now, from trying to persuade consumers of the merits of the Magic Leap 1 AR headset (price: $2,295) to focus on selling it to businesses.

The blog post also revealed that Magic Leap is laying off “a number of employees”, with Bloomberg reporting that the number in question is around 1,000 – half of the company’s staff. “We must decrease investments in areas where the market has been slower to develop, providing us with a longer runway while retaining the ability to explore and build on future use cases when the market signals readiness…”

A report in December that Magic Leap had sold only a few thousand headsets, and then another in March claiming it was exploring a potential sale, suggests that the company’s problems pre-date the Covid-19 crisis.

Music Ally’s next Learn Live webinar will help you build the strategies for artists to thrive in new international markets!

Music Ally's Head of Insight

Leave a comment

Your email address will not be published. Required fields are marked *