Fitbit Inc. (NYSE:FIT), the world’s leading makers of fitness wearables are in advanced talks to take over Pebble Technology, which is a pioneer in smartwatches. Pebble based out of California has been crowd-funded $40 million through Kickstarter. In fact, the business generated the biggest crowd-funding interest last year. Pebble Technology also managed to raise a further $15 million from venture capitalists in 2013.
It was learned that the deal is yet to be completed. But once it closes, Fitbit will have access to the expertise and intellectual properties of wearable devices. It is in line with their business focus of expanding the product range.
Earlier Bids to Acquire Pebble Technology
However, it did not go as per plans for Pebble. The business has been suffering from sometime and had to even lay off 25 percent of their staff earlier this year. Money flow was tight even after two rounds of funding, including one in last June when the company received $12.8 million.
Pebble has also been looking for a buyer, and in 2015 received a bid of $740 million from watch maker Citizen. Intel Corporation (NASDAQ:INTC) has reportedly also made of bid worth $70 million.
The CEO of Pebble, Eric Migicovsky, though, rejected both these offers.
This time, though, it may be different, and according to reports, the business might be willing to sell for much less than the Citizen offer. Observers are saying that Fitbit is willing to take over the business for anything between $34 and $40 million. This may not be adequate for Pebble as it barely covers their huge debts. Earlier, Migicovsky had confirmed that the business debt is about $28 million.
Pabble launched their smartwatch in 2012, making them a pioneer. The Apple Watch was announced two years later. The company had a strong following early on. Software developers loved their open app platform. But Pebble struggled to become mainstream.
Wearable Device Makers Are Struggling
There have been others too in the wearables market that has run into trouble. Jawbone, which was once the biggest rival of Fitbit (NYSE:FIT) in fitness trackers, has also been struggling. Microsoft too had to axe their digital health device a couple of months back, and earlier this year, Apple reported that the sales of their watch have more than halved.
Many players in the wearables market have withered away. But Fitbit remains strong. The business is still the reigning king.