Troubled wearables maker Fitbit (FIT) reportedly shelled out up to $40 million for Redwood City, CA-based Pebble Technology, the smartwatch initially pledged from Kickstarter campaigns.
Fitbit, based in San Francisco, is paying "a small amount" for struggling Pebble, technology website The Information reported Wednesday evening. Several other outlets also said they'd confirmed the news, with Engadget reporting a purchase price of $34 million to $40 million. TechCrunch, reporting the same figure, saying the purchase price "barely" allows Pebble to cover its debt.
The Financial Times reported that Pebble founder Eric Migicovsky was hoping for a purchase price of $200 million and fetched "far less than that."
Pebble tweeted, and subsequently deleted, the shrug emoji "¯\_(ツ)_/¯" without context this morning.
After raising tens of millions in funding through several Kickstarter campaigns, Pebble raised $15 million in a 2013 venture capital funding round led by Charles River Ventures.
According to The Information, Fitbit plans to phase out Pebble's devices, focusing instead on the company's technologies and intellectual property. As Engadget noted, Pebble's most recent watch, the $129 Pebble 2 released this year, is "more of a fitness tracker than a smartwatch," a fitting target for a fitness wearables company.
Both Fitbit and Pebble have struggled recently, with Pebble laying off 25% of its workforce in March and Fitbit trading at $8.36, or about 60% below its IPO price.
The deal would be Fitbit's second this year. On May 12, Fitbit acquired consumer electronics company Coin's wearable payment assets for undisclosed terms, saying it intended to develop a payment solution to incorporate into future products.
This comes as the wearables market has struggled. According to an Oct. 24 industry report from IDC, Pebble shrank 54% year-over-year in the third quarter of 2016, as did established players Apple (AAPL) and Lenovo (LNVGY) . Garmin (GRMN) , in contrast, increased its market share to 20.5% from 2.3% in the third quarter of 2015, and Samsung (SSNLF) grew modestly. Still, the industry as a whole has fallen 51.6%, according to the report.