Watchmaker Fossil Group said today it would acquire Misfit, which creates various wearable and sleep trackers in addition to a health-tracking platform, for $260 million. Sonny Vu, CEO of Misfit, will serve as Fossil’s CTO.
Misfit makes devices like the Shine, a wearable fitness and sleep tracker that costs $99 that the company says has a 6-month battery life. The company came out with an updated version of its Shine tracker in October just a few weeks ago. Misfit also has a lower-priced wearable, the Flash, that costs $29.
To be sure, the wearable and fitness-tracking market has become increasingly crowded. There are plenty of competitors like Fitbit, which also offers similarly priced activity trackers. Even Tag Heuer, with a $1,500 smartwatch, is starting to get into the connected device market. Misfit’s pitch was that it was more aesthetically pleasing, and with the Fossil brand it probably gives the startup a little more visibility.
Fossil Group, as part of the announcement, said that it would offer consumers traditional timepieces and fashionable connected accessories. In an interview with the WSJ, the company’s chief strategy and digital officer Greg McKelvey said Fossil Group would continue making Misfit’s wearable devices.
It’s tough to say where this puts the Misfit tracking platform relative to some of the other devices it works with, like the Pebble. With the addition of Misfit, the Pebble essentially went from just a smartwatch to an activity tracker, showing some of the potential of the service as a platform. Misfit also has an app for the Apple Watch, the Misfit Minute.
This is potentially alluded to in the announcement as part of a “multi-brand” strategy, but it still doesn’t offer an outright statement on the subject.
“Our world-class design and global distribution, combined with Misfit’s technology platform, creates a significantly advantaged, multi‐brand and global wearable technology business poised to drive the convergence of fashion and technology.”
And here’s what’s written in the company’s earnings release:
The Company believes the acquisition provides the opportunity to integrate Misfit’s software and hardware platforms in the next generation of connected accessories, further advancing Fossil Group’s connected accessories initiative.
Of course, Fossil could always decide to simply isolate the Misfit platform to Fossil watches, turning it into a walled garden of sorts.
In total, Misfit raised $64.4 million across three rounds of funding — most recently a $40 million round in October last year. Investors include GGV Capital, Xiaomi and Founders Fund. The deal will be done with a combination of cash and bank debt, according to the announcement.
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