The Sad Demise Of Pebble

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Photo Credit: Jonas Birmé/Flickr.com

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’s Journey

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.

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More investigation and analysis of Unicorn companies can be found in my latest Entrepreneur Journeys book, Billion Dollar Unicorns. Unicorns will also be discussed with some special guests during our 1M/1M Roundtable programs over the next few weeks. To be a part of the conversation, please register here. The term Unicorn was coined in a TechCrunch article by Aileen Lee of Cowboy Ventures.

Sramana Mitra is the founder of One Million by One Million (1M/1M), a global virtual incubator that aims to help one million entrepreneurs globally to reach $1 million in revenue and beyond. She is a Silicon Valley entrepreneur and strategy consultant, she writes the blog Sramana Mitra On Strategy, and is author of the Entrepreneur Journeys book series and Vision India 2020. From 2008 to 2010, Mitra was a columnist for Forbes. As an entrepreneur CEO, she ran three companies: DAIS, Intarka, and Uuma. Sramana has a master’s degree in electrical engineering and computer science from the Massachusetts Institute of Technology.

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