Misfit, maker of the activity tracking devices Shine and Flash, has raised $40 million from China-based strategic investors ecommerce giant JD.com and smartphone maker Xiaomi. Other new investors in the round include GGV Capital, which led the round, and Shunwei. Misift’s existing investors Founders Fund, Khosla Ventures, Horizons Ventures, and Norwest Venture Partners also participated. The company has raised a total of $63.6 million to date.
Misfit co-founder and CEO Sonny Vu told MobiHealthNews in an interview that the company is at breakeven and still has its last $15 million round of funding in the bank. Xiaomi, the third largest smartphone maker in the world, and JD.com, which Vu compared to Amazon, will help Misfit better understand the Chinese market and help it to develop and launch products more quickly. Vu said that while Misfit’s activity trackers are probably in third place in the US behind Fitbit and Jawbone, in China it is the most popular of those major brands.
Misfit, which informally dropped the “Wearables” from its name since it began offering smart home products in addition to bodyworn ones, has always been more globally focused than other activity tracking companies, and it has always had close ties to Asia. Its Shine device first launched at Apple stores in Hong Kong and Japan. The vast majority of its workforce – 95 out of 135 – works in either Vietnam, Hong Kong, or Korea, Vu said.
“You see a lot of Western brands coming to places like China and using the same formula that they have in the West,” he said. “You can’t walk in with your arms folded. There’s a lot of misunderstandings or not great ways of approaching it… you need to come in humbly, listening, and learn from the best.”
Misfit’s devices are currently sold in 51 countries and available in 21,000 stores around the world.
With this third round of funding Misfit is sitting on a $55 million war chest, which Vu said Misfit has no immediate plans for – just that it’s easier to spend money than to raise it and the company is in a good position.
“Maybe there’s acquisitions with some of the cash,” he said, “but we kind of have the people that we need to crank out the things we want to build for 2015. We are OK for now. Our resources have always been scarce but secure.”
Vu has always contended that he and his co-founders did not start Misfit to build activity tracking wearables, but with the exception of a sleep monitoring device co-branded with Beddit, that’s what Misfit offers consumers today. Vu said Misfit has three product categories: activity trackers like its Shine and Flash, smart home products (“a big push”, Vu said) like the Beddit device, and, finally, more advanced wearable devices that go beyond activity tracking. Misfit plans to offer more of all three. Its forthcoming line of advanced wearables will likely include devices that have no tie-in to fitness or health. The advanced wearables group will also feature more medically-focus
Vu believes that wearables need to get beyond use cases that focus on a sensor’s capability.
“Sensing is interesting but I think at some point people want you to ‘do’ stuff for them,” he said, cryptically. “We’re looking to go beyond just sensing… I think wearables and smart home products can actually ‘do things’. Stay tuned for that.”