The Information reports that Fitbit is very close to sealing the deal and is also paying a very 'small amount' for it. The report states that Pebble was facing financial challenges in the past year and was looking for a buyout. TechCrunch reports citing unnamed person close to the company that Fitbit is reportedly paying somewhere between $34 and $40 million. The Information adds that Fitbit will phase out the Pebble brand after the buyout, and that it is interested in Pebble's intellectual property instead.
This is much lesser than what the company was valued at a year ago. The source said that watch maker Citizen was looking to purchase Pebble for as much as $740 million in 2015. Before the launch of Pebble 2 in May this year, even Intel was willing to purchase Pebble for nearly $70 million. However, Pebble CEO Eric Migicovsky declined both offers then, and now is considering the $40 million maximum buyout, bending to the company's financial turmoil. The report states that Pebble will "barely cover their debts" with this deal.
The latest smartwatches from the troubled maker were the Pebble 2+ Heart Rate and Pebble 2 SE launched in October. The Pebble 2 + Heart Rate is priced at $129.99 (roughly Rs. 8,700) and the Pebble 2 SE is priced at $99.99 (roughly Rs. 6,700) respectively. Over the last year, Pebble has been finding it difficult to stay afloat, and CEO Migicovsky also announced earlier this year that his company had raised $28 million in debt and venture financing to keep the company running. In March, Pebble even let go of 25 percent of its staff to cut costs.
While Migicovsky blames the wariness of VCs to invest in smartwatch companies, the real problem is arguably that smartwatches haven't been adopted by users as steadfastly as many hoped it would. The industry is in dire need of disruptive innovation, and many big tech companies like LG, Huawei and Motorola refrained from even refreshing their smartwatch lineup this year. Fitbit itself has seen a downfall in its share prices because of its less impressive financial earnings.