Fitbit revealed in its annual report that it ended up buying fitness coaching app FitStar last year for about $24.8 million because it didn't end up having to pay the earnout of $7.7 million.
When the company went public a few months later, Fitbit broke down the sale. The company spent $13.3 million in common stock, $11.5 million in cash, and allotted $7.7 million for a contingent consideration, which is an earnout FitStar's sellers would unlock if they hit undisclosed performance milestones.
But in its recent annual report, Fitbit explained that the company did not pay any contingent consideration, because “certain market-based events were not satisfied”.
Fitbit has started to integrate FitStar’s coaching into its offerings. Earlier this year, Fitbit launched a new fitness tracking device, called Blaze, which has similar functionality to a smartwatch. In addition to a number of health tracking features, like continuous heart rate monitoring, sleep tracking, and activity tracking, the device offers on-screen workouts, powered by FitStar. Users can do guided workouts right from their wrist, including an 8-minute warmup and two different abdominal workouts.
FitStar offers two apps, FitStar Personal Trainer and FitStar Yoga. Both applications are free to download and use but most of the features require an in-app paid subscription. The apps provide users with workout training videos. They also track the user’s progress and help them reach fitness milestones. FitStar’s apps already sync with Fitbit as well as other activity tracking apps and devices including Jawbone and MyFitnessPal.