Compare / Magic Leap vs Pinterest
MAGIC LEAP
Magic Leap raised $3.5 billion on demo videos that made people believe augmented reality glasses would replace…
Ben Silbermann built a virtual pinboard for collecting pretty pictures and accidentally created one of the mos…
AT A GLANCE
FUNDING HISTORY
Magic Leap
BUSINESS MODEL
Magic Leap
Hardware and software platform for augmented reality. Originally consumer-focused (the dream was AR glasses for everyone), now pivoted to enterprise.
Magic Leap sells the Magic Leap 2 headset to businesses for use in healthcare, manufacturing, defense, and training. Revenue comes from hardware sales ($3,299 per unit for the ML2), software licensing, and enterprise service contracts.
The company also licenses its spatial computing technology to other companies. The pivot from consumer to enterprise dramatically shrank the addressable market but targeted buyers who have real budgets, real use cases, and real willingness to pay — unlike consumers who were not going to spend $2,300 on AR goggles.
Pinterest makes money through advertising — specifically through "Promoted Pins" that look nearly identical to organic content. This is the magic of Pinterest's business model: ads don't interrupt the experience because the experience IS discovering products and ideas.
A promoted pin for a kitchen knife set appears right alongside organic pins of kitchen designs. The user doesn't distinguish between "ad" and "content" because both serve the same purpose.
Shopping ads are the fastest-growing segment. Brands upload their product catalogs, Pinterest matches products to user searches and boards, and users can buy directly through the platform or click through to the retailer's site.
Pinterest gets paid per click or per thousand impressions.
Revenue reached $3.65 billion in 2024, up from $3.05 billion the year before, and 2024 was its first genuinely profitable year. Average revenue per user is growing but still well below Meta's — the upside is enormous if Pinterest can close that gap.
HOW THEY STARTED
Magic Leap
Rony Abovitz was a biomedical engineer who had previously founded and sold a surgical robotics company called MAKO Surgical for $1.65 billion. In 2010, he started Magic Leap with a vision that bordered on science fiction: lightweight augmented reality glasses that could overlay photorealistic digital objects onto the real world.
Not a screen strapped to your face — actual holograms that looked like they existed in your living room. The early demos were jaw-dropping.
A whale jumping out of a gymnasium floor. A tiny elephant dancing on your palm.
Google led the first major funding round. Then Alibaba invested.
Then AT&T. Then Saudi Arabia's sovereign wealth fund.
Between 2014 and 2019, Magic Leap raised $3.5 billion without shipping a single product. The hype was unprecedented.
The secrecy was legendary. Journalists weren't allowed inside the headquarters.
Employees signed NDAs that would make the CIA blush.
Ben Silbermann was a former Google ad operations employee who quit in 2008 to build apps. His first attempt was an iPhone app called Tote — essentially a mobile catalog that let women browse and bookmark products from fashion retailers.
Nobody downloaded it. But Silbermann noticed something in the data: users were saving products obsessively.
The collecting behavior was more interesting than the shopping behavior.
He teamed up with Paul Sciarra, a classmate from Yale, and Evan Sharp, a designer who was studying architecture at Columbia. Together they built Pinterest — a visual bookmarking tool that let people "pin" images from around the internet to organized boards.
Think of it as a digital mood board that anyone could make.
Pinterest launched as an invite-only beta in March 2010. Growth was painfully slow at first.
Silbermann personally wrote to the first 5,000 users, giving them his phone number and asking what they wanted. The early community was overwhelmingly women interested in home decor, fashion, recipes, and DIY projects.
By 2011, Time magazine named Pinterest one of the 50 best websites. By 2012, it was the fastest site in history to reach 10 million unique monthly visitors.
HOW THEY GREW
Magic Leap
The pivot to enterprise under CEO Peggy Johnson (former Microsoft executive) refocused the company on markets where AR has immediate, measurable value. Healthcare became the lead vertical — surgeons can see patient scans overlaid on the actual patient during procedures.
Defense contracts provided large, predictable revenue from government budgets. Partnerships with companies like SyncThink (concussion assessment) and Brainlab (surgical navigation) gave Magic Leap embedded distribution in existing enterprise workflows.
The Magic Leap 2 was purpose-built for enterprise — lighter, more comfortable for extended wear, and with dimming technology that works in well-lit operating rooms and factories. Getting FDA clearance opened the medical market in a way competitors haven't matched.
Pinterest grew organically through women sharing boards with each other. The weddings use case was the killer app — brides-to-be would create boards for dresses, venues, flowers, and invitations, then share them with their wedding parties.
That viral loop drove millions of signups.
SEO is the secret weapon. Pinterest pages rank extremely well in Google Image Search.
Someone searching "modern living room ideas" often sees Pinterest results on page one. That drives a large stream of organic traffic from people who were not looking for Pinterest at all.
Unlike other social platforms, which compete with Google for attention, Pinterest quietly benefits from it.
The shopping pivot has been the growth unlock. Under CEO Bill Ready (former Google and PayPal executive who took over in 2022), Pinterest aggressively invested in shopping features — catalog integrations, buyable pins, merchant verification, and visual search for products.
The thesis: Pinterest users are already in a shopping mindset, so removing friction between "I like this" and "I bought this" is the straightforward path to revenue growth.
THE HARD PART
Magic Leap
The $3.5 billion already spent is a sunk cost that no realistic enterprise revenue can quickly recoup. Competition from Microsoft HoloLens 2 (which had a multi-year head start in enterprise AR), Meta's Quest Pro, and Apple Vision Pro means Magic Leap is fighting well-funded incumbents.
The consumer AR dream is effectively dead — Apple's $3,499 Vision Pro proved that even Apple can't make consumer AR work yet at accessible prices. Employee trust was damaged by years of overpromising and under-delivering under the previous CEO.
The AR market itself is still nascent — total enterprise AR headset sales across all vendors number in the low hundreds of thousands, not millions. And the fundamental physics problem: making AR glasses that are lightweight, high-resolution, wide-field-of-view, and affordable remains an unsolved engineering challenge.
Pinterest's demographics are both an advantage and a limitation. The platform skews heavily female (over 60% women) and is strongest in home, fashion, food, and weddings.
Expanding beyond these categories to attract male users, younger demographics, and different use cases has been slow.
Competition for ad dollars is fierce. Pinterest competes with Meta, Google, TikTok, and Amazon for advertising budgets.
Most advertisers allocate the bulk of their spend to Meta and Google first, then consider others. Pinterest needs to prove its return on ad spend is competitive to win larger budget allocations.
Creator economy is underdeveloped. While Instagram, TikTok, and YouTube have massive creator ecosystems with monetization tools, Pinterest has historically been about content discovery, not content creation.
Users pin other people's content — the original creators often don't even know their work is on Pinterest. Building a creator program and driving original content creation on the platform has been a recent focus but lags far behind competitors.
THE PRODUCTS
Magic Leap
Magic Leap 2 — enterprise AR headset with the largest field of view in the industry (70 degrees), dimming technology for use in bright environments, and FDA 510(k) clearance for medical use. Spatial computing platform for building enterprise AR applications.
Healthcare applications — surgeons using AR overlays during procedures, medical training simulations. Manufacturing applications — remote assistance, 3D work instructions, quality inspection with AR overlays.
Defense applications — contracted with the US military for AR-assisted battlefield visualization. Developer tools and SDK for building custom AR applications on the Magic Leap platform.
Pinterest Home Feed — the core discovery surface showing personalized pins based on user interests, boards, and search history. Pinterest Lens — visual search technology that lets users take a photo of any object and find similar items to buy on Pinterest.
Pinterest Shopping — integrated e-commerce allowing users to browse and purchase products directly from pins linked to retailer catalogs. Pinterest Boards — the organizing system where users save and categorize pins into collections, used for wedding planning, home renovation, recipes, fashion, and more.
Pinterest Shuffles — a collage-making app for Gen Z users to create aesthetic mood boards, driving younger user adoption.
WHO BACKED THEM
Magic Leap
Investors include Google, Alibaba Group, AT&T, Saudi Arabia's Public Investment Fund, Temasek Holdings, and Andreessen Horowitz. Total funding exceeded $3.5 billion across multiple rounds, making Magic Leap one of the most heavily funded private tech companies ever.
Bessemer Venture Partners, FirstMark Capital, and Andreessen Horowitz were early investors. Fidelity and Valiant Capital participated in later rounds.
Rakuten invested strategically. The April 2019 IPO raised $1.4 billion at a $12.7 billion valuation.
Elliott Management, the activist investor, took a large stake in 2022 and pushed for operational improvements that contributed to the company's path to profitability.