Magic Leap is turning to a major health care company to save its future, potentially raising as much as $100 million

May 5, 2020 Augmented Reality, Orthopedics, Surgical Training, Zimmer Biomet

Magic Leap is looking to raise money from a major health company in order to protect its future, having just laid off around half of its workforce.

As first reported by The Information on Tuesday, Magic Leap CEO Rony Abovitz told staff in a memo that the company had signed a term sheet with “a major health care company” to drive its strategy forward.

Sources told Business Insider that talk of a deal with a health care company had been swirling around internally for some time, and that Magic Leap was hoping to secure $100 million from the deal.

However, the name of the company itself is not yet known. According to The Information’s report, one name being passed around internally is Zimmer Biomet, which is based in Warsaw, Indiana and develops treatments for bone and joint injuries.

The mystery company will reportedly use the headsets for surgical procedures and training if the deal is locked. But according to the emails seen by The Information, Abovitz told staff that the deal could still fall apart.

The potential of an acquisition by a medical company would represent the culmination of a striking change of fortune for one of the most hyped startups in years. At one point valued at $6 billion by investors including Google and Warner Brothers, Magic Leap mesmerized tech industry insiders and celebrities alike, with private demos of augmented reality technology that offered an almost hallucinogenic experience.

Rumors of a medical company stepping in to “save” the company were swirling around for several weeks before the company layoffs, one source told Business Insider. Some employees believed the company would try to purchase Magic Leap outright, but the $100 million amount being tossed around suggested an investment was in the cards.

But suspicions about an outright buy were stoked when Bloomberg reported that Magic Leap, which has raised over $2.5 billion over the years from investors including Google, was exploring a sale, citing that the company thought it could fetch $10 billion.

By Hugh Langley | Business Insider

Image Credit: Asa Mathat / Vox Media

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Peter Coffaro is a growth-driven and strategic executive with over 25 years of progressive management success in the medical device industry. With a proven track record and recognized expertise, Peter has established himself as one of the top influencers in medical sales, as acknowledged by prestigious publications such as the World Journal of Orthopedics, Exponential Healthtech, and MedReps.com. Throughout his career, Peter has accumulated 10 years of combined sales management experience, excelling in various roles including Director, General Manager, Distributor, and Vice President. He has worked for industry-leading orthopedic companies such as Zimmer, DePuy, and Stryker, solidifying his deep knowledge and network within the field. Peter’s passion for innovation and emerging technologies led him to found OrthoFeed, an award-winning blog covering digital orthopedic news and emerging medical technologies. Through this platform, he stays at the forefront of the industry and contributes to the dissemination of valuable insights. Peter is a three-time Hall of Fame award winner at Johnson and Johnson, demonstrating his exceptional contributions and impact on the organization. His expertise extends to areas such as organizational development, business development, sales management, digital marketing, and professional education. Peter earned a B.S. degree in Biology and Chemistry from Northern Illinois University, further complementing his comprehensive understanding of the medical field. With his wealth of experience, strategic mindset, and dedication to advancing healthcare, Peter Coffaro is a valuable asset and leader in the medical device industry.