The archive · Hardware & Devices · Financial decision · 2008–2013
Fitbit raises $43M to turn fitness trackers into a mass-market business
Fitbit closed a $43 million round from Qualcomm Ventures, SAP Ventures and SoftBank Capital with trackers in 15,000 US outlets and its Flex on backorder.
Fitbit
What the business is
Fitbit makes wireless fitness and health trackers — the Fitbit One and Zip clip-ons, the Flex wristband and a Wi-Fi smart scale — with online and mobile tools that keep steps, weight, food and sleep data together in one account.
How it started
Fitbit was a TechCrunch 50 finalist in 2008 and one of the first companies in consumer fitness tracking; it raised $12 million in January 2012 from Foundry Group, True Ventures, SoftTech VC and Felicis Ventures. Over the following year it evolved the original clip-on Tracker into the One, added the lighter Zip and the Flex wristband, expanded aggressively into EMEA and Asia-Pacific, and built US distribution past 15,000 retail outlets.
What happened
TechCrunch reported in March 2013 that Fitbit was raising $30 million in growth equity at a $300 million-plus valuation. By August it had closed more — $43 million per a Form D dated from a first sale on 2013-06-06, confirmed by the company with Qualcomm Ventures, SAP Ventures and SoftBank Capital joining existing shareholders Foundry Group and True Ventures. Demand was visibly outrunning supply: the Flex had been mostly on backorder since release, while the category filled with rivals — the Nike Fuelband, Jawbone Up, Withings Pulse and Misfit Shine — and Withings ($30M) and MyFitnessPal ($18M) raised that same summer.
No ending yet — it is still running.
Background
Fitbit makes wireless fitness trackers — the clip-on One and Zip, the Flex wristband and a Wi-Fi smart scale — and was one of the first companies in consumer fitness tracking, a TechCrunch 50 finalist in 2008. Its bet was that everyday consumers would wear small devices and keep their activity, weight and sleep data in one online dashboard, making fitness tracking a mass-market hardware-plus-software business.
By March 2013 TechCrunch reported Fitbit was raising $30 million in growth equity at a $300 million-plus valuation, after a $12 million round in January 2012 from Foundry Group, True Ventures, SoftTech VC and Felicis Ventures. The company had spent the prior year expanding into EMEA and Asia-Pacific and pushing US distribution past 15,000 retail outlets, while the newly launched Flex wristband was mostly on backorder.
On August 13, 2013 Fitbit confirmed a larger round: $43 million, recorded in a Form D with a first sale dated 2013-06-06, from Qualcomm Ventures, SAP Ventures and SoftBank Capital alongside existing shareholders Foundry Group and True Ventures. The category was heating up around it — Nike Fuelband, Jawbone Up, Withings Pulse and Misfit Shine were competing, and Withings and MyFitnessPal raised $30 million and $18 million respectively the same summer — and Fitbit said the money would fund new products and a bigger global footprint.
What has to be true
- A months-long Flex backorder proved demand was constrained by supply, making growth capital the binding constraint on Fitbit's expansion.
- More than 15,000 US retail outlets plus corporate wellness traction showed trackers were moving from early adopters to the mass market, justifying more than the planned $30 million.
- The round paired strategic investors Qualcomm Ventures, SAP Ventures and SoftBank Capital with repeat backers Foundry Group and True Ventures to fund products and global growth.
- Rivals Nike, Jawbone, Withings and Misfit were shipping or raising at the same moment, so the raise was also about holding distribution leadership in a heating category.
What can be applied
When demand visibly outruns supply, the gap is a funding signal, not a problem: Fitbit raised above target while its Flex sat on backorder and rival rounds were resetting the category.
Aftermath
As of 2013-08-13 Fitbit had closed a $43 million round recorded in a Form D (first sale 2013-06-06) and confirmed by the company, with proceeds earmarked for new products and a bigger global footprint after a year of EMEA and Asia-Pacific expansion. The Flex remained in short supply and the tracker category was drawing competing rounds — Withings $30 million, MyFitnessPal $18 million. The case stops at the raise announcement; no later milestones are in the record.
Sources
- Fitbit Raises $43 Million From Qualcomm Ventures, SAP Ventures, And SoftBank Capital
- Fitness And Health Tracker Fitbit Is Raising $30M At A $300M-Plus Valuation
- Fitbit Inc. — Form D, Notice of Exempt Offering of Securities
- Fitbit Raises $43 Million
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