Lytro is probably most well-known for making visually interesting "light-field" cameras, but it has taken that technology in a different direction more recently. The company is now developing high-end VR capture and processing technology, and Google is reportedly very interested in that. According to TechCrunch, Google is in the process of buying Lytro for $40 million.
Founded in 2006, Lytro shipped its first consumer light field camera in 2012. The square tube-shaped device could capture images with multiple focal points, allowing you to change the focus later. It released a more powerful version with a traditional camera form factor in 2014. Unsurprisingly, neither one caught on. Lytro recently dropped the consumer angle and began developing professional VR capture technology.
At the core of Lytro's technology is a method for recording the "light field" of an image. Thus, you have a composite of all focal planes that can be processed from 2D into 3D. That could be quite useful for VR where accurate 3D representations are essential for immersion and reduction of motion sickness.
If Google does pick up Lytro for $40 million, it won't be a big payday for investors. The company has taken around $200 million in venture funding since its founding more than a decade ago. Google would get Lytro's technology for use in VR, and Lytro's investors would get at least a little of their money back. Neither company has confirmed the deal, though.