NOTE: This article was first published in 2013.
Press releases by big international corporations such as Google, Samsung, Adidas, Nike, and Sony make one think that big corporations have a monopoly on wearable tech. But this is far from the truth. Several tech startups also have their share of glory. Here are my pick for the top five wearable tech startup companies.
Jawbone is the foremost name in wearable tech. The company is responsible for releasing Up, which is a fitness-tracking wristband, and Jambox, which is a wireless speaker.
In recent years, Jawbone has been bulking up and showing the rest of the world how serious it is. For instance, it acquired Visere and MassiveHealth in February 2013. Visere is a design company, while MassiveHealth is a mobile app maker. Both acquisitions made sense, since Jawbone needed a great app to complement the wristband and a design that would make the wearable tech fashionable.
After these acquisitions, as if to cement its foothold in the wearable health tracking space, Jawbone acquired BodyMedia for at least $100 million in April 2013. BodyMedia is one of the first companies to go into body monitoring technology.
All of these acquisitions are paying off. Jawbone said that the demand for its products is so high that in September 2013 it needed to raise money to keep up with the orders. In a round of financing, Jawbone was able to raise more than $100 million. Around $93 million was raised through debt financing from J.P. Morgan, Fortress Investment Group, Silver Lake, and Wells Fargo. It got an additional $20 million from current investors Khosla Ventures, Andreessen Horowitz, Sequoia Capital, and Kleiner Perkins.
Fitbit functions like Jawbone’s Up in that it helps you track your fitness activities, such as monitoring your steps, your calories, and the distance you have covered. You can tie it up with other Fitbit tools, such as the mobile app or the online site where you can log the food you eat. You can use the Aria WiFi scale so that you could track your weight, BMI and body fat as much as you want. You could even track your sleep.
Softbank Capital, Qualcomm Ventures, SAP Ventures and other top-notch investors gave the company around $43 million in August 2013, exceeding Fitbit’s targets of around $30 million in capital funding.
Pebble is a wearable smart watch manufacturer. More than just tracking your runs and your lifestyle, Pebble smartwatches allow you to connect with your smartphone. You will know who is calling you or sending you an SMS message or e-mail without having to take your phone out of your pocket. What’s more, like a regular smartphone, you can download apps to make it more functional. So pair it up with your smartphone and control your device without even touching it. Right now, it has apps for four categories: music control, fitness, watch faces, and notifications.
Pebble works just like any smartwatch does, but what makes Pebble worth noting is how it raised money. Bloomberg reported in April 2012 that Eric Migicovsky, who first hatched the idea, went to incubator Y Combinator, thus making the Pebble one of the few projects under the program to generate revenue. Migicovsky then raised $375,000 from angel investors. But then the company had trouble getting any more money. Pebble’s next move was unexpected. It turned to crowd-funding.
On Kickstarter, Migicovsky posted the smartwatch and asked people to fund it. The response was overwhelming, with close to 20,000 people contributing more than $2.66 million in only the first three days, much more than the targeted $100,000. The feat made Pebble the most successful project on the Kickstarter platform. The project is also the highest grossing venture, with close to 69,000 backers pledging $10.27 million after only 37 days.
After that market response, the company should not have had any problem getting funded, even by venture capitalists who snubbed it before. In fact, it was able to secure $15 million in funding from Charles River Ventures in May 2013. During that time, the company also launched its SDK and Sports API in the hopes that app developers would pick it up and make more apps for the watch.
How successful is this electronic paper watch? The company said that it had sold around 275,000 units by July 2013, and their apps have already been downloaded at least one million times. Pebble also sold out as soon as it debuted at Best Buy outlets across the country.
When it comes to wearable tech, nothing has captured the public’s imagination better than virtual reality. So much so that VR has inspired movies and other elements of pop culture.
One company, Oculus VR, is taking on virtual reality helmets. Oculus Rift helmets are slated to go on sale in 2014. The head-mounted displays will be available for Windows powered PCs and then for Mac, Android, and Linux computers. The Rift displays video games as well as other content in 3-D. You can view the scene with a wide-field of view of around 110° at HD resolution.
Oculus Rift is another Kickstarter success story, getting more than 9,500 people to pledge close to $2.5 million in 30 days. In June 2013, Oculus VR secured another $16 million of funding, led by Matrix Partners and Spark Capital. The money will be spent to manufacture the helmets in general production.
Although technically not really a wearable tech, QR codes, and other barcodes and tags are a huge part of the Internet of Things. What’s more, a lot of wearable technology uses QR codes, such as medical information bands or t-shirts.
When it comes to scanning applications that can help you decode or read QR codes and other similar tags, there is one company that stands out: Scan. Scan has some very impressive investors backing it. In fact, it brings together two very bitter rivals in its list of investors: Facebook and Google. Other investors include Menlo Ventures, AngelList, Atom Factory, CRV, Ludlow Ventures, Flixster, Kicklabs and Entree Capital, among others. Not a bad list of backers, especially if you consider that Scan has nothing but a QR code scanner application.
Scan hopes to make QR codes very usable and easy to use. The scanner application now works with one-dimensional barcodes, NFC, and even some image recognition.
These are the top five wearable tech startup companies, for now. Because of wearable tech’s explosive growth, expect more new enterprises to pop up and challenge the big ones.