Last week, there were reports about Fitbit trying to acquire Pebble for around $40M.
In a blog post by Pebble CEO Eric Migicovsky, the smartwatch company confirmed the acquisition, although it doesn't mention the price. In the post, Migicovsky says that "We have made the tough decision to shut down the company and no longer manufacture Pebble devices." The acquisition included only key personnel and intellectual property but not the hardware, which is why there will be no more Pebble watches to be made.
Pebble was one of the first smartwatch makers before tech heavyweights such as Apple and Google joined in the fray. They were successful through the crowdfunding platform Kickstarter and became a shining beacon for crowdfunding and hardware startups. However, in recent years, as smartwatches and wearables became more crowded from the likes of Samsung, Garmin, Apple and Google, the company could no longer keep up. The most recent Kickstarter campaign made by Pebble only attracted close to $13M preorders, in comparison to the campaign prior to it where they made $20M pledges.
Signs of the company in trouble have already showed up earlier this year when Pebble laid off twenty-five percent of its staff back in March. In 2015, there were already reports that the company had to turn to bank loans just to stay afloat as VCs were no longer interested giving them more capital.
Migicovsky has also explained what will happen to Pebble products after the acquisition. The devices will continue to work as normal and there are no immediate changes in the user experience, but functionality is expected to decline in the future. More importantly, warranty support for Pebble devices is no longer available. Meanwhile, Kickstart backers who have not yet received their rewards will be refunded.
Pebble shutting down is a major disappointment for crowdfunding as a viable business model for small innovators in the face of more powerful competitors.
