In February, the business raised almost $800m in a round which was led by Chinese e-commerce company Alibaba and included VC firm Andreessen Horowitz, financial services firms Fidelity and JP Morgan, and corporate venturing units from chip maker Qualcomm and media group Warner Brothers Entertainment. This valued Magic Leap, which was founded by the firm’s CEO Rony Abovitz in 2011, at $4.5bn – a large amount for a company recently described by Wired magazine as “the world’s most secretive startup”.

Alibaba’s considerable interest follows the Google-led series B round in October 2014, which raised $542m, and is a sign of just how high expectations are for the potential of virtual reality (VR) and similar technologies. Over recent months, a number of VR systems have been brought to market, from the Facebook-owned Oculus Rift to Google’s smartphone-powered Cardboard device and similar products from HTC and Samsung. But in contrast to the entirely screen-based experience of VR, Magic Leap is working on systems that make digitally-created images appear in real-world settings – technology known as mixed or augmented reality. This involves wearing special glasses or goggles made with photonics chips that can superimpose 3D graphics on to a user’s field of vision – a process that one Magic Leap employee has described as “dreaming with your eyes open”.

At the time of February’s fundraising, Abovitz said: “Here at Magic Leap we are creating a new world where digital and physical realities seamlessly blend together to enable amazing new experiences. This investment will accelerate bringing our new Mixed Reality Lightfield experience to everyone.”  The involvement of Alibaba as what Abovitz described as a “strategic partner” will give Magic Leap access to more than 400 million consumers who use the Chinese company’s platforms.

Magic Leap has so far been reluctant to reveal exactly how its technology works or what applications it is planning to make available. Nor is it clear how soon it will reach the market, although Abovitz has said that the C round capital injection would help expedite this process. The involvement of Warner Brothers as well as film studio Legendary in the latest round of funding suggests that at least some of Magic Leap’s focus is on the entertainment market. Lord of the Rings trilogy director Peter Jackson is also reported to be working with Magic Leap to develop new forms of interactive storytelling.

The company faces competition in the mixed-reality segment from, among others, Microsoft’s HoloLens, a holographic headset which has recently started shipping to developers. Like Magic Leap, though, Microsoft has also been unable to say when it expects the first retail units to be available.

However, if the level of financial commitment shown by some of the world’s biggest corporate venturing units is anything to go by, mixed reality could prove to be one of the landmark technological developments of the internet age.