According to a scoop from The Information last night, fitness tracker market leader Fitbit will buy beleaguered smartwatch pioneer Pebble. TechCrunch and Engadget are both citing anonymous sources, saying that the deal is for between $34 million and $40 million -- barely enough, TechCrunch says, for Pebble to cover its debts.
The news isn't entirely unexpected -- it was clear that Pebble was struggling in March, when the company laid off 25 percent of its workforce. The company, which initially emerged as one of the first crowdfunding phenomenons, always seemed a little outmatched once Apple staked out the smartwatch space as its next big thing -- though CEO Eric Migicovsky claimed in 2015 that Apple was having "no material impact" on their sales.
According to the reports, Fitbit is interested in Pebble's operating system and other technological assets, not in continuing the Pebble brand as is. Therefore, Pebble products will probably be phased out following the acquisition. This doesn't preclude Fitbit venturing even further into the generalist smartwatch space as a result of the acquisition. In the past, however, CEO James Park has been down on that idea, saying that Fitbit's narrower use case is actually a strength in the market.
Pebble may have bought into that mentality also, though it doesn't seem to have been enough to save them. Fitness has long been a part of Pebble's offering since its 2012 Kickstarter launch, which was followed almost immediately by an integration with Runkeeper (now owned by Japanese shoe company ASICS). Pebble has since integrated with Misfit and Jawbone as well. But the company made a more earnest turn toward health in December of last year, when it launched the Pebble Health app. The app tracks users’ activity and automatically detects their sleep phases and sends the data to Timeline, Pebble’s user interface. After the layoffs in March, the company declared a new focus on health and fitness.
Pebble has raised only $15 million in venture funding (and some debt) but has picked up an unprecedented $43 million over the course of various crowdfunding campaigns.