Fitbit's IPO is more evidence wearables have grown up
Wearable company Fitbit began trading on the New York Stock Exchange this morning, ending the device maker's quest to go public. According to Forbes, the IPO raised $732 million for the company that's trading with a market cap of $6 billion. What do those numbers mean exactly? Well, wearables, despite being niche devices that studies show are easily replaced by phones, are a big business capable of raking in billions. To put it simply, wearables have grown up.
Fitbit's IPO follows several quarters of steady revenue growth, including a $126 million increase in Q1 over the same period last year. If you'll recall, the company announced a trio of new devices last fall, so that provided an extra push. What's also interesting is that Fitbit is one of the few hardware companies going public nowadays. More often than not it's the software startups and services typically making the move to become publicly traded companies. It's particularly interesting for a wearable maker, especially when you consider a lot of folks buying them only commit to daily wear for a short time.
However, as Fitbit's numbers show, there's big money to be made in wearables. The company nabbed a personal training app to improve the experience for users and hired a former HTC lead designer to guide product development. Of course, it's also being sued by Jawbone for "plundering" sensitive product information and skin issues are an on-going problem. And if Jawbone has its way, Fitbit may face a sales ban in the US, which is sure to eat into those healthy valuation and sales figures.
