Magic Leap has an almost magical way of getting money.
The secretive startup is working on what it calls "mixed reality" technology. It's different from the virtual reality we've all heard about, which uses goggles to strap a screen to your face and display computer-generated images. In mixed reality, computer-generated images are layered on top of the real world.
How impressive Magic Leap's work is remains an open question, in part because almost no one has seen it. That hasn't stopped the Dania Beach, Florida-based company from talking about it for more than a year. Now, big-time investors, including Warner Bros. and Chinese Internet giant Alibaba, are plunking down nearly $800 million to be part of the project. The company hasn't said when its product will be released, nor how much it will cost or what it will look like.
This week's added investment, which puts Magic Leap's valuation at $4.5 billion, is just the latest example of the hype surrounding -- let's call it "reality plus" -- and the hope these gadgets will become the next money-spinning products. So what if Google Glass, the closest we've seen to one of these products realized, has all but disappeared? Facebook CEO Mark Zuckerberg, who bought major VR maker Oculus for $2 billion two years ago, has gushed about the technology's potential to be the next major advance in computing.
Brian Wallace, Magic Leap's marketing chief, agrees there's a lot of hype in the market. But he says Magic Leap will be different.
"Magic Leap is not VR. VR is focused right now narrowly on gaming and is not portable. Our Mixed Reality Lightfield is portable and has many multiple applications -- including gaming -- that are considerably broader," he said Tuesday. "These applications can be applied both inside and outside the home and office."
Reality-plus technology could be a $120 billion business by 2020, according to Digi-Capital, an acquisitions advisory firm. That's part of the reason why the latest round of funding pushed Magic Leap's value so high.
Of course, Magic Leap isn't the only one chasing the opportunity. The list of reality-plus competitors is big. Samsung's $99 Gear VR went on sale last year and the $599 Oculus Rift is scheduled to hit stores in March. Google created a VR device called Cardboard that slots in your phone. It sells for about $20, though you can build your own with some cardboard, tape and time. All these gadgets/goggles aim to shut out the real world and trick your brain into accepting the reality they want you to see.
Meanwhile, Microsoft makes the HoloLens, which layers computer images onto the real world like Magic Leap. The company is selling prototypes to developers, though it hasn't set a date for hitting store shelves.
Tech insiders have gotten a chance to play with these devices, including CNET's Scott Stein, who once cried because the images he saw were so powerful.
Few people know for sure if Magic Leap is better or even all that different from other devices about to hit the market. But no one seems to think the hype is misplaced, either, even as Zuckerberg has tried to tone down expectations, saying initial sales could be slow.
Brian Blau, an analyst at Gartner who once worked for a VR company, said the news that Magic Leap will be using some of its investment on manufacturing the technology is a good sign. Historically, making these devices, particularly their displays, has been the hardest part because they're so specialized.
"They have a really good chance of solving that problem," he said.
Now we just need to see if it's magical.
CNET's Scott Stein contributed to this article.