Magic Leap Inc., the mixed reality startup backed by more than $2 billion in funding, today appointed former Microsoft Corp. business development head Peggy Johnson as chief executive officer.

The leadership change will advance Magic Leap’s pivot to the enterprise, as well as potentially improve its chances of raising additional capital. 

The hire comes two months after Magic Leap closed its latest $370 million round of funding from investors. The cash infusion reportedly enabled the startup to avert, or at least halt for now, a massive round of layoffs that would have halved the size of its workforce.

Johnson is taking over a company in the midst of a major pivot. Magic Leap, which makes the Magic Leap 1 mixed reality headset (pictured), this year announced it was exiting the consumer market in order to focus on the enterprise. Microsoft, where Johnson held the title of executive vice president of business development, is a Magic Leap rival and one of the leading players in the enterprise mixed reality market with its HoloLens 2 headset.

Johnson brings decades of industry experience to Magic Leap. The executive spent 24 years at chipmaker Qualcomm Inc., including as a member of its executive committee, before joining Microsoft in 2014.

Johnson’s responsibilities at the technology giant included leading its M12 startup investment fund. The executive, Magic Leap said in a release today, “managed Microsoft’s relationship with the venture capital community” as part of her role. Johnson’s close familiarity with the venture capital community could be a major boon for Magic Leap, which isn’t profitable and may as a result seek to raise additional funding from investors.

The 24 years of chip industry experience the executive brings to the table will also be an asset for the startup. For its rival HoloLens 2, Microsoft has developed a custom processor to provide enhanced performance. Johnson, a former Qualcomm executive, could boost the startup’s efforts to make its hardware more competitive with Microsoft’s headset. 

As of December 2019, Magic Leap was reportedly prototyping a second-generation headset with 5G connectivity.

Johnson is set to officially take up the CEO role on Aug. 1. The executive is taking over the post from Magic Leap’s founder, Rony Abovitz. One of Johnson’s first orders of business will likely be the “revenue generating strategic partnerships” the startup was as of April negotiating with potential partners. 

“As CEO, I look forward to strategically building enduring relationships that connect Magic Leap’s game-changing technology and pipeline to the wide-ranging digital needs of enterprises of all sizes and industries,” Johnson said in a statement.

Microsoft, for its part, is trying to press its market share advantage with the HoloLens 2. The company recently made the HoloLens 2 available for purchase directly through its website and added Research Mode, a feature targeting academic and industrial customers pursuing research in areas such as robotics.

Photo: Magic Leap