Startup Magic Leap seeks $1 billion funding, working on debut product

SAN FRANCISCO (Reuters) - Magic Leap, a highly funded and secretive startup that has promised breakthrough augmented reality technology, is seeking to raise up to $1 billion in fresh funding from investors, according to a new corporate filing.

Florida-based Magic Leap has authorized the sale of more than 37 million shares at $27 each in an effort to raise about $1 billion, according to the Oct. 11 filing with the State of Delaware.

The filing indicated the company was seeking to raise the cash but did not indicate the amount that Magic Leap had so far secured from investors, said a spokeswoman for CB Insights, a venture capital data company that first obtained the filing. It may end up raising less than $1 billion.

Magic Leap has been in fundraising mode for a least the past few weeks, and has held talks with Temasek Holdings, an investment firm owned by the government of Singapore, to join a$500 million investment that would value the company at $6 billion, which Bloomberg first reported last month.

Magic Leap spokeswoman Julia Gaynor declined to comment. The company has not confirmed the Temasek investment, which would be included in the $1 billion round.

The new financing round comes as Magic Leap readies a long-awaited debut product, a headset that shows images overlaid against the real world, known as augmented reality. The company has been working on prototypes for years but has not yet had a product for consumers to buy. Despite this, it has raised $1.4 billion from investors such as venture capital firm Andreessen Horowitz and e-commerce company Alibaba, giving it a valuation last year of $4.5 billion.

Magic Leap has come under scrutiny for misleading investors with dazzling demonstrations of technology that will not actually be in the final product, and releasing marketing videos that purported to be Magic Leap technology but were actually created by special effects companies, according to a report in December by news site The Information.

While the company has been working in secret for years, releasing little information about its launch date, competitors such as Facebook Inc’s Oculus have gained ground.

Reporting by Heather Somerville; Editing by Andrew Hay