Augmented-reality start-up Magic Leap said to be exploring a sale that could fetch US$10 billion

Magic Leap, the start-up that raised more than US$2 billion to build an augmented-reality device, is exploring options including a sale, according to people familiar with the matter.

The Plantation, Florida-based company is working with an adviser to consider strategic options that could also include forming a partnership or selling a significant stake ahead of a potential listing, said the people. Magic Leap could fetch more than US$10 billion if it pursues a sale, the people said, asking not to be identified because the information is private.

Tech companies have been placing bets on the promise of augmented-reality products, which have also found uses in health care and other industries.

The entire hardware sector is facing new threats, from tariffs in the US-China trade war to supply chain shortages, after factories closed with the coronavirus outbreak. The pressures are resetting expectations at major companies such as Apple, and may hit even more acutely at private start-ups that rely on outside investors to keep their operations going.

Magic Leap, which counts Alphabet’s Google and Alibaba Group among its largest investors, is gauging potential interest from large tech companies including Facebook and medical giant Johnson & Johnson, the people said.

(Alibaba is the parent company of South China Morning Post).