Neither of these private companies will have a product on the market for several years, and so when they each raised roughly five times what the typical company raises in an initial public offering, jaws dropped in the tech and biotech industries. Moderna, in fact, set a record as the biggest private funding round for a biotech company, ever, and since it was hatched five years ago, the 150-person company has raised a cool $1 billion in total.

AR stands for augmented reality, and mRNA for messenger ribonucleic acid. Company number one, in Florida, is called Magic Leap , and it raised $542 million last fall. Company number two, in Cambridge, is Moderna Therapeutics , and this month it announced $500 million in new funding.

This is a story about a billion-and-a-half bucks, two companies founded in 2010, and two acronyms that may both be a big part of the future: AR and mRNA.

Investors make these kinds of big bets when they believe they have an opportunity to create a pillar company in an emerging industry: a Biogen, an Apple, a Google, a Tesla. And when they don’t pay out, they are often looked at in the rear view mirror as moments of irrational exuberance.


I first heard about Magic Leap in the summer of 2012, when I had breakfast with Ric Fulop of the Waltham venture capital firm North Bridge Venture Partners. Wearable computing, Fulop gushed, was “gonna be big,” and Magic Leap was developing a new kind of wearable that would make it possible to produce realistic digital mirages in front of a user.

Fulop had been connected to the company by Antonio Rodriguez, an investor at Matrix Partners in Cambridge, and it sounded like if the two local firms did the deal, Magic Leap might move to Boston, or at least set up an office here.


When I pinged Magic Leap’s founder, Rony Abovitz, all he said was that he was in the midst of talking to investors on the East and West coasts. Then, silence until last year, when the company announced its existence and a total of $592 million financing in two separate infusions, led by Google, Qualcomm Ventures, and a number of others. Matrix and North Bridge had been edged out, and Magic Leap now has five offices around the world — but none in Boston. Magic Leap also announced a collaboration with New Zealand-based Weta Workshop, which created the special effects for blockbusters like “Avatar.” (Magic Leap wouldn’t comment for this story.)

Magic Leap’s device, Fulop explained this month, projects images directly onto its wearer’s retinas, and it knows exactly where you’re looking. That lets it overlay digital images onto the real world around you — what’s known as augmented reality. It could be used to allow students to play a spy game as they walked around campus, or to let an architect visualize blueprints when visiting a construction site.

“There’s nothing else like it in the world,” Fulop says, who adds that we likely won’t see a public demo this year.

Instead of investing in Magic Leap, Rodriguez at Matrix put millions into a virtual reality startup called Oculus VR. (Magic Leap’s founder had directed him to the company.) While augmented reality looks to blend digital images with real environments, Oculus’ headset shuts out the world and creates entirely digital realms.


Facebook bought the Southern California company last year for $2 billion, and its Oculus Rift device — sort of like a high-tech scuba mask — is expected to hit the market this year.

“The Magic Leap problem is really hard,” Rodriguez says. “It’s not like Google Glass, where you are just putting a flat data screen in someone’s field of view. You need a computer model of the world the person is seeing, and you need to put things in it in a way that looks convincing.” While early demos have involved giant computers and “huge hose-like cables” linking them to the headset, Rodriguez thinks Abovitz “is going to solve the problem because he has more than $500 million to solve it.”

But with Magic Leap and Oculus located elsewhere, it’s an open question whether Boston will see many companies spring up to design software for their products.

An image from a Magic Leap animated demonstration video suggests how its wearable device, once developed, would provide an “augmented reality’’ experience. MAGIC LEAP PHOTO ILLUSTRATION

With Moderna and mRNA, by contrast, we’re currently at the hot table in heart of the casino. Messenger RNA is a type of RNA molecule carries instructions from your DNA to other sites in a cell, enabling it to produce proteins. Moderna is attempting to modify the mRNA so that it can carry special kinds of recipes for the cell — enabling it to make proteins that would treat a disease, or antibodies that could fend off a virus. So far, the company has shown this can work in mice and monkeys, but not yet in people.


Some of the breakthrough research behind Moderna was done at Harvard Medical School, and the fledgling company incubated at Flagship Ventures in Cambridge. Chief executive Stéphane Bancel says making medicines inside your cells, rather than a factory, seemed to many like “a totally crazy idea” at first, but the progress has been faster than he expected. For instance, a year ago no one was sure Moderna’s approach could produce a vaccine, but the company has shown it can protect animals from a lethal dose of virus “only one week after an injection of one dose,” Bancel says, unlike vaccines that require several weeks or doses to provide protection.

The company has struck up partnerships with pharmaceutical giants such as Merck and AstraZeneca that will explore how Moderna’s custom-crafted mRNA, which must be injected, can work against a wide range of diseases and viruses. Bancel says that he expects several tests in humans to commence in the next year or two. With the massive influx of funding this month, Moderna could hire 100 to 150 employees this year.

What are the limits of what mRNA-based drugs can do? “We don’t know,” Bancel says. That answer hints at unlimited upside — but also the eventual sting of reality, since everything has limits.

Banking more money than any biotech before it means there is a big spotlight on Moderna, Bancel acknowledges, and plenty of skeptics. “We’re playing a long game,” he says. “We’re putting our heads down and focusing on the science — and we’ll know the results in the next 24 months.”


Scott Kirsner can be reached at kirsner@pobox.com. Follow him on Twitter @ScottKirsner and on betaboston.com.