During Fitbit’s Q4 earnings call yesterday, management revealed it had paid $23 million to acquire Pebble Watch last year. At one point in time, Pebble was valued at $740 million. In a brief statement, Fitbit (NYSE:FIT), highlighted the purchase:
Acquired assets from Pebble for $23 million and Vector Watch for $15 million, comprised of intellectual property and talent.
Of course, Pebble Watch raised much more than that via sales on Kickstarter. Pebble also raised money from other investors but in the end, it wasn’t enough to remain competitive in the emerging market for wearable technology. The rise and fall of Pebble Watch is a great case study for anyone looking to compete in the IoT space. Kickstarter provided a valuable channel for presales and user feedback to build a company from zero to millions. But challenging established companies like Apple and Samsung is really, really hard.
Fitbit is having its own challenges. Shares in the company are trading near their 52 week low. Holiday sales of their devices were disappointing. The company is cutting expenses, including a staff reduction, while guiding lower on forthcoming earnings.
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