Fitbit raises $43 million from three new investors

By Brian Dolan

Fitbit Flex__ColorsSan Francisco-based Fitbit, which offers various clip-on and wristworn activity tracking devices as well as a connected weight scale, has raised $43 million in its fourth round of funding, from three new investors. A rumor started by TechCrunch back in March claimed that Fitbit had raised just $30 million in its fourth round and at a valuation of $300 million or more. Fitbit's new backers include Softbank Capital, Qualcomm Ventures, and SAP Ventures. Fortune's Dan Primack reports that SoftBank led the round. The company's investors in its $12 million third round of funding in January 2012 included Foundry Group, True Ventures, SoftTech VC and Felicis Ventures. Foundry and True both participated in the recent round, too.

A statement from Fitbit says that the funds will be used to support growth at the company's San Francisco and Boston offices. It plans to hire more hardware and software engineers, designers, product managers, data analysts and marketers. Fitbit devices are now sold in 15,000 retail locations across the US, according to the company. 

"This is our ninth investment in a digital health company since we established the Qualcomm Life Fund, which we established 1.5 years ago," Qualcomm Life Fund's Director Jack Young told MobiHealthNews. "We have been making steady investments in this area since the formation of the fund. While there is a lot of activity in digital health now, consumer health is the first place we have seen real traction, the first to reach scale and massive adoption. Companies like Fitbit are attracting investors because it is one of the earliest companies to attract a massive user base that continues to grow at a rapid rate."

Qualcomm Ventures, which the Qualcomm Life Fund is nestled within, is now the third largest corporate investor based on activity after Google and Intel's venture arms. Qualcomm Life Fund's portfolio includes AliveCor, AirStrip Technologies, Cambridge Temperature Concepts, ClearCare, goBalto, Noom, Sotera Wireless, and Telcare. Qualcomm also recently announced the formation of an incubator, called Glassomics, focused on ways to leverage Google Glass and other wearables for healthcare.

SoftBank Capital has affiliations with Japanese mobile operator SoftBank Mobile, which incidentally recently began offering a 24/7 healthcare service hotline to its members along with a Fitbit Flex device.

The big funding round for Fitbit is just the latest big news in activity trackers this year: In July Fitbit competitor Withings raised $30 million in its second round of funding and Jawbone acquired longtime wearable device maker BodyMedia for an undisclosed sum. Misfit Wearables' Shine device also commercially launched recently with premium real estate on Apple Store shelves at a pricepoint of about $120.

At the Consumer Electronics Show (CES) this year, Fitbit unveiled a new Bluetooth Smart-enabled, wrist-worn activity tracker, called Fitbit Flex. Like most of its other trackers, the Flex also helps users track their sleep health if worn at night. What set it a part from previous offerings from the company was that all of Fitbit’s previous activity trackers were intended to be worn clipped on to clothing or tucked into users’ pockets. The Flex, which cost about $99 was the first wrist-worn device from the company.

In September 2012 Fitbit launched its first Bluetooth-enabled activity trackers: Fitbit One and Fitbit Zip. Legacy Fitbit devices only uploaded information to the Fitbit portal and app when the wearer was nearby a wireless-enabled hub that plugged into the user’s computer via USB, and the new Fitbit devices offer this too for users that do not use Bluetooth 4 compatible devices.

At the beginning of 2012, Fitbit unveiled the Aria WiFi scale, its first product offering outside of wearable activity monitors. Similar to Withings’ WiFi scale, the Aria measures weight, body fat percentage, as well as BMI and uploads the data via the user’s home WiFi network to Fitbit’s online portal.

Fitbit sells its devices in various retail stores including Target, Best Buy, Brookstone, REI, RadioShack, and more. It also worth noting that former Allscripts CEO Glen Tullman has written about the possibility of including Fitbit data in EHRs in the future.

In October 2011 Fitbit launched the Ultra, the second generation of its original wearable fitness monitor. Like the original Fitbit device, the Ultra is a wireless-enabled, fitness and calorie tracking device small enough to clip on to the user’s clothing. Fitbit leverages an internal motion detector to track the wearer’s movement, sleep, and calorie burn during both the day and night. Fitbit provides users with metrics like: steps taken, miles traveled, calories burned, calories consumed, bedtime, time to fall asleep, number of times awoken, total time in bed, and actual time sleeping.

Last month Fitbit announced an upgrade that enabled its devices wirelessly sync to Android phones and tablets via Bluetooth 4.0. Initially, syncing is enabled for the Samsung Galaxy S3 and the Samsung Galaxy Note II, with more promised to come.

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