Hype hasn’t been an issue for Andy Rubin’s new hardware startup, Essential. Speculation has been circling the Android founder’s next move since he unceremoniously parted ways with Google.
Funding, it seems, hasn’t really been a problem, either. Bloomberg is reporting that the nascent smartphone maker has raised $300 million to bring its technology to the masses.
A spokesperson for the company declined to offer TechCrunch a comment on the matter, though the report does seem to jibe with Rubin’s recent appearance onstage at the Code conference several days after the filing, where he told the crowd, “We’ve raised a substantial hundreds of millions of dollars.” Rubin then appeared to hold up three fingers, repeating with a smile, “Hundreds of millions of dollars that I can’t talk about.”
If true, the Series B, filed last month, puts the company’s value at a few hairs shy of a unicorn, at $993 million. That number comes from Equidate, a new firm that offers up valuations of private startups for investment firms. It tells TechCrunch that its own numbers were sourced from public filings.
This marks the second major round of funding for Essential, following a $30 million raise last year, led by Redpoint Ventures and Playground Global, Rubin’s own investment firm, which also helped incubate the startup.
Rubin had earlier reached out to SoftBank group as a potential source of outside funding. Its financing would have valued Essential at $1 billion, but the $100 million investment ultimately fell through, reportedly due in part to the Japanese firm’s investment with Apple.
The problem: Essential will be going head to head against the new iPhone with its own premium Android handset. And while Apple apparently didn’t block the deal, SoftBank is said to have backed away due to the nature of the competition.
Essential’s second product, a smart home hub, will also be a direct competitor to Apple’s newly announced HomePod speaker.
While it’s clear that investors ranging from firms like Tencent to manufacturers like Foxconn have faith in Essential’s future, the company’s got a tough road ahead of it as it attempts to win over public interest in a pair of highly competitive spaces. Essential COO Niccolo de Masi acknowledged as much in a recent TechCrunch interview, outlining a 10-year plan filled with modest growth in sales and consumer loyalty and telling us, “We’ll delay maximizing profitability until the company is more mature because we’re building a brand here.”
Rubin’s name was enough to build up the hype cycle ahead of the phone’s launch. It remains to be seen how long that — and the funding will hold out.
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