Smartwatch maker Pebble was one of the most heavily funded startups on crowdfunding platform Kickstarter. It grew rapidly, but could not sustain its hyper growth pressures. Fitbit acquired it recently for its software assets and it does not plan to continue with its products.
Pebble founder Eric Migicovsky began tinkering with watches as a student and after graduation in 2009, started working full-time with a small team on the concept of a smartwatch. Their first product was InPulse, which worked only with BlackBerry. It sold about 1,500 units and earned $200,000 in revenue.
They had raised about $375,000 in angel financing but were struggling to raise a larger sum to take their new product to market. They then turned to Kickstarter in 2012 with a fundraising target of $100,000. Within 28 hours, they raised $1 million. They went on to raise $10 million from about 69,000 people for the first Pebble smartwatch, which started shipping in January 2013. They next raised $15 million in Series A funding from Charles River Ventures to scale to demand. They had over 1 million app downloads within months.
The first Pebble displayed emails, incoming calls info, Facebook messages and tweets, delivered weather alerts, gave calendar alerts, and acted as an alarm and timer. It connected to iOS and Android devices via Bluetooth. In June 2014, they had another hit called Pebble Steel. In the first quarter of 2014, they had 35% of the wearables market while Fitbit had more than 50% share.
In March 2015, they raised a record $20 million on Kickstarter from about 78,000 backers, but were still struggling financially. They released the Pebble Time Round but the increasing competition from Apple Watch took a toll. They laid off 25% of their workforce in 2016 and turned their attention to the health market with the Pebble 2+ Heart Rate.
Its health bet did not pay off and it tried to refocus its energies on its core strength. It turned to Kickstarter for the Pebble 2, Time 2, and Pebble Core. They collected about $12.8 million but in late 2016, it was acquired by Fitbit for around $40 million.
Fitbit would be tapping into Pebble’s ecosystem. However, it will be phasing out the products, which is a shame for a company that was the tech darling for about four years.
Shane Luke, Former CPO at Recon and Director of Product in Nike wearables says the main reason for the failure of Pebble was that the wearables market matured very fast and did not grow in line with early predictions. Well, competing with Apple in a consumer product realm for a small company is an unsurmountable task.
Andrew Orlowski on The Register says pressure from investors made it move away from its DIY roots and move to health and fitness as that is where it could find a buyer.
And it did.
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