Augmented and virtual reality startup Leap Motion has created undeniably “amazing” hand-tracking hardware that could be used for both work and gaming, but a new report from Business Insider suggests that its business acumen isn’t quite as impressive. Over the past five years, Leap Motion “blew” two separate acquisition attempts by Apple for reasons that aren’t entirely clear, but appear to be due to its executives’ unrealistic expectations.
According to the report, Apple first met with Leap Motion cofounders Michael Buckwald and David Holz about an acquisition in 2013, discussing the prospect of acquiring the company to bolster Apple’s then-nascent mixed reality initiatives. With only the rarest of exceptions, Apple generally subsumes acquired companies, integrating their small teams and projects into its own structures.
That was apparently Apple’s plan for Leap Motion, as well. The Cupertino company planned to purchase Leap’s team of employees and IP, but wasn’t interested in the company’s key accessory — an $80 box capable of translating complex hand motions into gesture inputs for computers. Leap Motion’s device has clear applications for bringing hand and finger gestures into virtual enterprise and gaming spaces.
Holz reportedly appeared disinterested in the offer, telling the company that it “was no longer innovative” and “that its technology ‘sucked,’ ” before going on to praise Google’s rival mobile operating system Android. A former Leap Motion employee claims Holz effectively said, “I’m never going to go work for those guys, they’re the devil,” and the potential buyout was scuttled.
Despite the failure of the initial attempt, and growing signs of Leap Motion’s financial instability, Apple continued to express interest in the company — and in the absence of a deal, wound up hiring some of its employees to work on AR products. For its part, Leap Motion followed up its hand-tracking accessory by creating a bizarre-looking AR headset design called North Star, which it quickly open-sourced to spur innovation within the AR community.
In the late spring of this year, Apple apparently tried to buy the company again, offering between $30 to $50 million, and came close enough that formal offer letters and HR benefits packages were sent out. But the deal again “mysteriously fell through,” this time apparently due to the founders’ insistence that Leap Motion was worth more than that.
The startup has been valued at as much as $306 million, but hasn’t generated enough revenue to reach investors’ performance goals — the hand-tracking accessory has a limited market, and the company isn’t actually selling the AR headset it created. In recent months, Leap Motion has lost employees and left its expensive San Francisco offices, the report notes, and is now taking meetings with other companies to explore potential deals. Whether it remains independent or winds up acquired by someone appears to be largely a question of whether it’s willing to accept a lower offer than it might have achieved at the peak of its potential.