Fitbit Buys Struggling Pebble For $40 million

Fitbit, Inc., revealed that it will be acquiring the fledging startup Pebble Technology Corp. The deal was made as Pebble continues to experience less than expected sales of its products. Many in the industry were not surprised however considering that there have been stories coming out saying that the two are on the verge of a final agreement.

Indeed, various reports have been saying that a deal was likely and this was offcially announced by Fitbit in a statement released saying that it will mainly be acquiring the intellectual property that Pebble holds in relation to firmware and software. Certain key personnel were also included in the deal. Fitbit disclosed though that hardware products will not be included.

In the same statement, Fitbit CEO James Park said that by buying Pebble, it is now in a position to expand both its ecosystem and platform at a faster rate. This will ensure that Fitbit will play a significant role for a wide range of demographics, he added. It will also offer as a good tool especially for insures, healthcare provides, and even employers, continued Park.

This deal with Fitbit was confirmed by Pebble through a blog post on its website by founder Eric Migicovsky who said that as a result of different factors, the company will not make any more devices and will shut down. He also said that while the decision was indeed difficult, he is happy to say that a number of members will be joining the new company in order to continue working on wearable devices. Migicovsky ended by thanking the community for their years of support.

While Fitbit declined to reveal the actual price of the purchase, insiders say that it will not exceed $40 million. Despite showing initial success through Kickstarter, cracks started showing when it was reported that Pebbles was reducing its workforce by as much as 25%. With this deal however, the two companies hope it will be enough to take on Apple Watch, and even Android Wear.