Pebble was a smartwatch startup that raised $59 million in total funding, including a record-breaking $10 million Kickstarter campaign in 2012. [3]3 In December 2016, Pebble shut down and sold its assets to Fitbit for less than $40 million, after turning down acquisition offers of $740 million from Citizen in 2015 and $70 million from Intel in early 2016. [3, 7]37 The company ceased manufacturing and refunded Kickstarter backers for unfulfilled orders, while Fitbit acquired Pebble's software engineering team but did not offer jobs to the majority of Pebble's employees, including CEO Eric Migicovsky. [7]7
Timeline
| Date | Event | Source |
|---|---|---|
| 2012 | Pebble raised more than $10 million on Kickstarter, an unprecedented amount for a crowdfunding campaign at the time. [3] | 3 |
| 2015 | Pebble was offered $740 million by watchmaker Citizen, but CEO Eric Migicovsky refused the offer. [7] | 7 |
| 2016-01 | Pebble was offered $70 million by Intel, but CEO Eric Migicovsky refused the offer. [7] | 7 |
| 2016-12 | Pebble shut down and sold its assets to Fitbit for less than $40 million. [3, 7] | 37 |
| 2016-12-08 | Pebble announced it was no longer promoting, manufacturing, or selling any devices, and warned that functionality or service quality may be reduced in the future. [7] | 7 |
| 2016-12-16 | Pebble said Kickstarter backers who had not received their watches would receive a full refund by this date. [7] | 7 |
Money raised
Pebble raised more than $10 million on Kickstarter in 2012. [3]3 Pebble eventually raised a total of $59 million. [3]3 Pebble was first offered $740 million by watchmaker Citizen in 2015. [7]7 Pebble was offered $70 million by Intel in early 2016. [7]7 Pebble sold to Fitbit for less than $40 million in December 2016. [7]7 Pebble ended its last Kickstarter campaign less than six months before the acquisition, raising $12 million to produce and sell three new devices: the Pebble 2, Pebble Time 2, and Pebble Core. [7]7
Investors named in the sources: Kickstarter backers3, Fitbit7.
What happened
Pebble was a smartwatch startup that gained attention in 2012 by raising more than $10 million on Kickstarter after being passed over by venture capital firms. [3]3 The Kickstarter campaign made Pebble an internet sensation and led to venture capital investors seeking to invest. [3]3 Pebble eventually raised a total of $59 million. [3]3 Pebble focused on simpler watches with e-ink screens and long battery life, eschewing powerful devices and high-resolution screens. [7]7 Pebble was hurt by the consolidation of the smartwatch market around platforms with strong links to pre-existing smartphone operating systems, such as Android Wear and the Apple Watch. [7]7
Pebble was first offered $740 million by watchmaker Citizen in 2015, but CEO Eric Migicovsky refused the offer. [7]7 Pebble was offered $70 million by Intel in early 2016, but CEO Eric Migicovsky refused the offer. [7]7 Pebble's business never fully rebounded, and internal discussions began after the holiday shopping season about what changes needed to happen. [5]5 In December 2016, Pebble shut down and sold its assets to competitor Fitbit. [3]3 The deal valued Pebble at less than $40 million, according to a report from Bloomberg. [7]7
Fitbit acquired Pebble's software engineering team, but the majority of Pebble's employees, including CEO Eric Migicovsky, were not offered jobs by Fitbit. [7]7 Pebble announced it was no longer promoting, manufacturing, or selling any devices. [7]7 Pebble warned current owners that their watches may stop working at some point in the future. [7]7 Pebble refunded Kickstarter backers who had not received their watches, including everyone who tried to buy a Pebble Time 2 or Pebble Core. [7]7 Pebble said backers would receive a full refund by December 16, 2016. [7]7
Pebble's last Kickstarter campaign, which ended less than six months before the acquisition, raised $12 million to produce and sell three new devices: the Pebble 2, Pebble Time 2, and Pebble Core. [7]7 Pebble had used Kickstarter to sell pre-orders and tighten links with customers long after similar businesses would have moved to a more conventional shop. [7]7 Pebble's statement to backers said, "It's a bittersweet time, no doubt. We'll miss what we're leaving behind, but are excited for what the future holds." [7]7 Some Kickstarter backers expressed disappointment, with one saying it was the "Last time ever I will use Kickstarter and will advise everyone I know to avoid!" [7]7 Another backer noted that their Pebble Round should have shipped in September but did not, and they were told of delays, but now they believed it was never going to be produced. [7]7
Fitbit co-founder and CEO James Park said Fitbit "sees an opportunity to build on our strengths and extend our leadership position in the wearables category." [7]7 Pebble's own statement said that "Pebble devices will continue to work as normal … Pebble functionality or service quality may be reduced in the future." [7]7 The acquisition came less than six months after Pebble ended its last Kickstarter campaign. [7]7 Pebble had gained a reputation for swimming against the tide of the wider smartwatch industry. [7]7 Other smartwatch and wearable manufacturers, such as Microsoft's Band and Fitbit's Blaze, also struggled in the market. [7]7
Fitbit cut its Christmas sales forecast in early November 2016. [7]7 Pebble's failure was cited as an example of hardware startups failing due to lack of demand, according to a CB Insights study. [3]3 The CB Insights study found that the biggest reason hardware startups fail is a lack of demand for their products. [3]3 The study cited overspending as the second reason for failure and waning interest after an initial crowdfunding campaign as the third. [3]3 Pebble's story was used as an example of how crowdfunding success does not automatically equate to widespread consumer demand. [3]3
Pebble's assets were sold to Fitbit, and the brand was shut down. [6]6 Fitbit was interested in Pebble's employees, intellectual property, and operating system. [6]6
Where the founders are now
Pebble's CEO Eric Migicovsky was not offered a job by Fitbit after the acquisition. [7]7
Sources
- Pebble, the Twitter alternative previously known as T2, is shutting down | TechCrunch, TechCrunch, 2023-10-24
- Pebble, the ‘Twitter killer’ social media app, meets an abrupt demise and shuts down after 10 months - Tech Startups, Tech Startups - Tech News, Tech Trends & Startup Funding, 2023-10-25
- Why Do Startups Fail? Because Hardware is Hard, WIRED, 2017-09-28
- How the hot startup that stole Apple's thunder wound up in Silicon Valley's graveyard, Business Insider, 2016-12-17
- Report: Fitbit to acquire Pebble and shut down brand, marketingdive.com, Dec 2, 201
- Kickstarter darling Pebble shut down after being bought for $40m, the Guardian, 2016-12-08
How this case file was put together
Every statement on this page carries a numbered note, and every note points to a court record, a regulatory filing or a named publication in the list of sources. Each statement was checked against the text of the sources it cites before it was published: a figure, a date or a name the cited source does not contain was cut rather than kept. Allegations are shown as allegations, with their status at the time of the source (filed, charged, convicted, pleaded, settled, dismissed or pending). Quoted lessons are the words of the person or publication named with them, copied from the cited source; nothing here is our own opinion of why the company failed.
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