Lytro, a 'magic' camera startup that raised $140 million, announces layoffs and pivots to virtual reality

When Lytro launched a few years ago, it promised to revolutionize digital photography with technology that seemed pretty magical.

Lytro was a "light field" camera that let people shoot photos carelessly, then focus them later. Photographers could upload photos to their computers, click on a portion of the image, and bring that part into focus, easily changing a photo's perspective in real time. The technology seemed so innovative, Steve Jobs met with Lytro's founder before he died.

Now, after raising nearly $100 million, Lytro is changing its strategy. Instead of focusing on photography, Lytro will dive into virtual reality and videos, and investors just gave it a $50 million Series C round to do so, Re/code reports.

Lytro also told its employees to expect some layoffs as the company pivots. Between 25 and 50 employees out of 130 may be let go.

"We are going to have to make some cuts in some areas so we can staff up in some new ones," Lytro CEO Jason Rosenthal told Re/code. The new funding bumps up Lytro's valuation five times from its last round of funding, Rosenthal said.

Lytro released its first product, a consumer camera equipped with innovative light-field technology that allows users to take stunning "living pictures" in 2012. Last year, Lytro's founder Ren Ng left Lytro to become a professor at the University of California Berkeley.

Here are some examples of photos that can be taken on the original Lytro camera and its successor, a $1499 camera called Illum:

It's pretty amazing.

The company will not be abandoning photography completely. Re/code reports Lytro will release a "third-generation, higher-resolution camera technology" later this year.

Lytro has raised $140 million since its 2011 founding from investors including Allen & Company, GSV Capital, Danhua Capital, K9 Ventures, Greylock Partners, North Bridge Growth Equity & Venture Partners, New Enterprise Associates, and Andreessen Horowitz.