Temasek looking to invest in US start-up

SAN FRANCISCO • Temasek Holdings is looking at investing in a US start-up, Magic Leap, that has raised more than US$1.3 billion (S$1.75 billion) to build a wearable computing device.

Magic Leap has already attracted high-profile investments from companies including Alibaba Group Holding, Qualcomm and Alphabet's Google, which invested directly in the firm and put chief executive officer Sundar Pichai on the board. Magic Leap's last financing round, led by Alibaba, valued the company at US$4.5 billion.

Temasek is considering taking part in a new financing round of over US$500 million for Magic Leap that would value it at close to US$6 billion. The company is trying to raise more cash as it readies a long-awaited debut product.

The latest round has not closed. Magic Leap hopes to ship its first device to a small group of users within six months, said three people familiar with plans. Magic Leap and Temasek declined comment.

Magic Leap has wowed investors with a promise to perfect a futuristic field - augmented reality (AR) - that all the leading consumer technology firms are chasing. But it has never given a launch date for its device and offered few details.

According to the sources, the headset device will cost between US$1,500 and US$2,000, although that could change. It would be bigger than a pair of glasses, but smaller than virtual reality headsets like Facebook's Oculus Rift.

The headset would require users to carry a puck-shaped device around the size of a smartphone that would wirelessly provide processing and information to the glasses, said the sources, who were not authorised to speak publicly.

Magic Leap's large financing needs and the long gestation of its product are due, in part, to its ambitious goal: Developing its own hardware and software, as well as costly electronic components for the device. This has raised questions about whether Magic Leap can succeed in the nascent AR market.

The company is promising to create a headset that would use a type of light-field technology to simulate 3D images superimposed on the real world, providing what the company calls "mixed reality". The proprietary system would project patterns of light into the eye, letting people perceive virtual objects similar to the way they naturally see real things, without the nausea of some existing virtual reality experiences, chief executive officer Rony Abovitz said.

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A version of this article appeared in the print edition of The Straits Times on September 15, 2017, with the headline 'Temasek looking to invest in US start-up'. Print Edition | Subscribe