Technology

After years of speculation, some mockery, and more than a little befuddlement, the Magic Leap augmented headset is arriving in the hands of developers and users — and its first product is a somewhat janky piece of magic.

After officially announcing the availability of the product for pre-orders last month, the company is pulling back the curtains on all of the prestidigitation itbeen cooking for the past several years.

The companyfirst developer conference is slated for tomorrow, with a keynote bright and early in the morning, but the $2.3 billion dollar augmented reality headset manufacturer let a slew of VIPs, media types (including your humble reporter) take a look at the first official content partnerships to come from its formerly super secret studios.

Development studios like Weta Workshop (whose partnership began with Magic Leap nearly a decade ago) and Wingnut AR (the augmented reality development studio founded by Peter Jackson) have revealed new games that involve battling robots and spider infestations (respectively); while the medical imaging companyBrainlab and the direct to consumer furniture retailer and design consulting service, Wayfair, pitched their augmented reality wares to show the business use case for Magic Leapmagic leap into virtual reality.

In all some sixteen companies pitched demos at the curtain-raising event today.

Earlier this afternoon Weta just debuted their augmented reality game as a preview to the Magic Leap conference and itimpressive. The robot battling Dr. GrordbortInvaders is the clearest vision of what Magic Leapplatform can do.

Magic Leap teased the two companies& vision for what immersive augmented game play could like in its promotional materials for years, but the culmination of the development work the two have undertaken is about three to five hours of gameplay battling robots that appear from the walls and floors and doors of any room. It(pardon the easy pun) magic.

According to Weta games director Greg Broadmore, the final game is the result of six years of collaboration between the creative studio and Magic Leap.

Rony Abovitz, Magic Leapvisionary chief executive, first reached out to Weta with a vision for &Our Blue& a far-reaching, immersive, science fiction-influenced immersive world that Abovitz wanted Weta to help realize. Abovitz kept in touch with the Weta team and as he began putting the pieces together for Magic Leap, brought the studio on board to develop content.

Dr. Grodbortis the first fruits of that partnership and itpretty stunning.

Setting aside the problems that Magic Leap still has with field of view and with slight glitches in the game mechanics (which could entirely have been the fault of this author), Dr. Grordbortlays out the Magic Leap headset as a convincing gaming device (albeit at a somewhat price-prohibitive$2,295 apiece.

In the game, users are given a backstory by the eponymous Dr. Grordbort, who informs players that they&re the last best hope to save the world from a robotic alien invasion. From there on in, itabout picking up a blaster and shooting the potential robot invaders who appear from portals around a room.

To start the game, a user maps their space by wandering around it with the Magic Leap on. Once the device has the lay of the land ( a process that can take up to four minutes — depending on size) the narrative will commence and the user is drawn into Dr. Grordbortworld and gameplay.

&The game helped shape the platform,& said Brodmore. &Dr. Grordbortwas the problem and Magic Leap is the solution.&

Without the close relationship to Magic Leap that Weta enjoyed, the game from Wingnutstudio was far less robust, but no less enjoyable.

In their first foray into Magic Leapworld, the augmented reality studio created a game that puts the user into the most bizarre job training session they&ve ever experienced.

As the new hire at an extermination company that deals with some fairly vicious and viscous insects, the user is put through some paces with how to kill virtual bugs in real space. The mapping engines and graphics are exceptional, the narrator walking a user through the game shows off Magic Leapexceptional use of sound technology and the humor in the game is reminiscent of some of the best Wallace and Gromit set pieces.

Beginning with a simple bat, and working up through a flamethrower, players were instructed in how to kill various creepy crawlies and concoct a serum to attract others. I&m not a fan of first person shooters (or much of a gamer in general), but that Wingnut game was damn fun.

And if gaming was one side of the spell that Magic Leap was hoping to weave with new users, business use cases were the other.

In partnership with Brainlab, the company is trying to show how its toolkit can be used in both educational and operational theaters for physicians and surgeons. In a demonstration users were encourage to take a look at a replica of a brain tumor patientbrain scan in three dimensions. The device is aimed at helping doctors plan surgeries and understand the potential ramifications of different approaches to removing growths in a brain.

Meanwhile, the retailer Wayfair put users through a demonstration of its first Magic Leap application. A visualization tool that takes furniture from a virtual showroom into the real space that furniture would occupy.

Itpart of a longterm skunkworks development project set up within the online retailer to explore applications for augmented reality in a bit to sell more stuff to more folks without the need for a physical showroom (although Wayfair has launched a few popups earlier this month)

Behind all of this is a simple truth.Magic Leap needs content — almost as much as it needed to reduce the form factor and improve the usability of its first headset.

It has achieved those last two demands above the expectations of even the most hardened critic. Wearables still look goofy, but they feel good and the pack that powers the Magic Leap experience is among the best — lightweight and wearable, and with a three-hour battery charge, among the best in the industry.

Therestill some assembly required, as a user needs to determine the type of headset they&ll need and select a nosebridge that gives the headset the proper lift so its hardware can work properly. If a user wears glasses, itgoing to require a special prescription that can be ordered separately as an attachment that fits into the headset.

The other pieces of hardware packaged with the Magic Leap include a motion sensing hand controller (similar to what users have experienced as part of any video game console) and a hip pack with the processing power of a notebook computer.

The device doesn&t need to be tethered to a computer, but it does only work indoors.

Setting aside the limitations of the first generation of a hardware device, the Magic Leap is about as impressive a piece of augmented or virtual reality hardware as I&ve seen. Other companies may have better fields of view and a more compact device, but they lack the variety of content that makes Magic Leapofferings shine. The early partnerships the company has inked have, indeed, paid off.

And as it rolls out its offerings the company is learning the lessons of wearable headsets past.

Its initial customers — in Chicago, Los Angeles, Miami, New York, San Francisco, and Seattle — will receive a home visit from a Magic Leap employee who will walk them through the way the product works in a thirty minute to sixty minute demo. Thatthe same level of bespoke treatment that Google Glass offered to its initial explorers.

One benefit of an AR headset like Magic Leapis that itmuch, much easier to navigate than a fully immersive VR headset. Another, is the flexibility it offers in terms of applications from a mixed reality setting.

&We think of this as a productivity device,& Sadaigi said. &Browsing for stuff on the web. Thatthe computing environment. Your space is your screen and your space becomes another variable on the computing platform. We want to make people love the space they live in. Using mixed reality to … the app that we&re presenting today we think of it as a design experience.&

One of the big breakthroughs in the companyplatform is the controller and how easy it is to use, as Sadaigi noted in our conversation. &The controller is doing a lot of work for you. [The company] is giving you something new… that is kind of the old, but in a new form. Itsimplified the experience to swiping and clicking.&

More complicated interactions can be handled by using the voice interface the company has built into the device and the eye scrolling feature thatpart of the inside out tracking the company uses.

Behind all of this is Abovitz and his crazy vision for a new platform for computing.

&That decision to start something new and bigger and more ambitious, to try to change all of computing, was a bit nuts. Itlike Bilbo Baggins having to step out of the Shire,& Abovitz told VentureBeat earlier this year. &If you spend enough hours in a Magic Leap system, italmost impossible to go back to your phone or computer or television. You realize that they&re very thin slices. Magic Leap gives you a giant volume of computing. When you actually get to play with it, spatial computing means you work within a volume, not just a slice.&

SoftBank may soon own up to 50 percent of WeWork, a well-funded provider of co-working spaces headquartered in New York, according to a new report from The Wall Street Journal.

SoftBank is reportedly weighing an investment between $15 billion and $20 billion, which would come from its $92 billion Vision Fund, a super-sized venture fund led by Japanese entrepreneur and investor Masayoshi Son.

WeWork declined to comment.

SoftBank already owns some 20 percent of WeWork. The firm invested $4.4 billion in the company in August 2017, $1.4 billion of which was set aside to help WeWork expand in China, Japan and Southeast Asia.

This August, WeWorkraised another $1 billion from SoftBank in convertible debt. At the same time, WeWork disclosed financials to a handful of media outlets, sharing that its revenue had doubled to $763.8 million in the first half of 2018 as losses increasedto $723 million.

SoftBank, for its part, seems to have a hankering for real estate tech. Not only has it become a key stakeholder in WeWork, but it has deployed significantamounts of capital to Opendoor, Compass, Katerra and others.

Last month, the Vision Fund backed Opendoor, a platform for buying and selling homes, with $400 million. The same day, it led a $400 million round for Compass, valuing the real estate brokerage startup at $4.4 billion. As for Katerra, SoftBank poured $865 million into the construction tech business in January.

WeWork, founded in 2010 by Adam Neumann and MiguelMcKelvey, has raised nearly$5 billion in a combination of debt and equity funding to date. It was valued at $20 billion in 2017, though reportsearlier this summer estimated its valuation would fall somewhere between $35 billion and $40 billion with additional capital from SoftBank. A $40 billion valuation would make it the second most valuable VC-backed company in the U.S. behind only Uber.

WeWork has more than268,000 members across 287 locations in 23 countries.

Tech startups have found all kinds of ways to lend money to those hampered by either too little or not very good credit.

The approach of a nearly two-year-old, 15-person San Francisco-based startup called Divvy Homes is among the more creative we&ve seen, even while we question (for now) whether itgood over the long term for potential customers.

How it works: In Cleveland, Memphis, and Atlanta, where Zillow estimates median home prices are $52,000, $82,000, and $242,000, respectively, Divvy will enable a person or family to select a home they&d like to someday own, then to buy that home with Divvyhelp. The family chips in at least two percent for a down payment. Divvy pays for the rest, then it collects a monthly amount that includes both market-rate rent and an equity payment.

It does this until the newly installed residents have amassed a 10 percent stake in the home. The reason, says the company: By partnering with Divvy, tenants — some of whom have credit scores as low as 550, which is considered &very poor& by the consumer credit ratings agency Experian — can build their credit scores and eventually land a mortgage insured by the Federal Housing Administration, which requires a credit score of at least 580.

According to CEO Brian Ma — who co-founded the startup at the company creation studio HVF Labs— the idea is for this to happen within three years, at which point Divvy will sell and transfer the property over to them.

Iteasy to appreciate why this might be attractive to potential homebuyers who can&t secure a traditional mortgage in the current market — not all of whom suffer from poor credit but who are sometimescontract and self-employed workers without months of salary stubs to show nervous bankers. For example, Divvy says that it charges less in rent as a buyerequity begins to add up. That equity, it insists, can later turn into the person or familyfirst mortgage payment.

For largely self-serving reasons, Divvy does what it can to ensure that the house isn&t a dud, too. As Ma describes it, Divvy uses data science and algorithms to ensure that a property makes sense financially, meaning that it will likely appreciate and that the tenants aren&t paying so much that they can&t simultaneously build equity in their homes.

Divvy also works with inspectors to make doubly certain each home is &move-in ready and won&t have large unforeseen expenses during the lease, like major roof, structural, pest, or foundation issues,& says Ma, who previously co-founded three startups, as well as spent several years as a program manager with Zillow.

Still, italso easy to imagine that some of Divvyaspiring homeowners will never actually own their homes. Consider: While Divvy may help some percentage of them improve their credit score, roughly 62 percent of consumers with credit scores under 579 are &likely to become seriously delinquent(i.e. go more than 90 days past due on a debt payment) in the future,& says Experian.

Naturally, like any other property owner, Divvy will evict tenants who don&t pay, even if it does so reluctantly.

&If a rent payment is missed, we will follow up to see how we can help,& says Ma. &Most of the time, itimmediately curable or curable within a couple days. If itbeen longer than a week and we believe the tenant is going through some hardship, we will work our best to offer alternatives, including allowing them to purely rent the property by dropping the equity payments to lower their monthly payment. If we can&t find a way to cure the situation, we will go through an eviction procedure.&

Divvy also establishes the buyback price at the time that itbuying the home — which can work for, or against, the tenants who hope to own it someday.

Adena Hefets, another Divvy co-founder who worked previously in both VC and private equity, recently explained to us that Divvy has a back-end model that projects where the house would price three years down the line and it allows tenants to &buy it back at that price at any time.& Yet buying it back early would invariably mean overpaying. Moreover, in the cities where Divvy is operating, housing prices don&t move around a lot, so a tenant could be overpaying at any buyback price thatnorth of where the home sells today. (Home prices in Northeast Ohio were rising as of last spring, but they were still at 2004 levels.)

With the broader housing market poised for a slowdown, tenants wanting to buy their homes might decide itcheaper in the end to just move out of them and find something else. They&d still get 10 percent of the sale of the home, even if they overpaid for it over their three-year commitment. But where would that leave Divvy We&d guess it would leave it looking more like a modern residential real estate investment trust than a &rent-to-own innovator.&

Thatnot a terrible thing for Divvy, even if it sounds a little less glamorous. In fact, the company — which says italready buying one home a day — is today disclosing that it has raised $30 million in equity and debt from Andreessen Horowitz (a16z) and a commercial bank called Cross River Bank that notably is backed by a16z.

Ma declines to say how much of the round is equity and how much is debt. But he says that Alex Rampell, an a16z investor whose other real estate-related bets include a different fractional ownership startup, Point, has joined the companyboard.

Pictured above (at TC headquarters), left to right: Divvy founders Nicholas Clark, Brian Ma and Adena Hefets.