The manufacturer of Jawbone fitness scraps will cease to exist. It is not always good when the company has a lot of money

In early July, it became known that Jawbone will cease to exist. The firstreported by The Information . The founder of the company Hussein Rakhman will take up a new project with a similar name Jawbone Health Club. Presumably, his new startup will collect data for medical institutions.

The manufacturer of fitness scraps and speakers Jawbone did not need money. During the existence of the company (it was founded in 1999), more than $ 900 million was invested in it. In 2014, shortly before the appearance of Apple Watch Jawbone, it attracted $ 147 million when estimating the entire company of $ 3.2 billion. In other words, investors believed in Jawbone and hunted in a startup.

Jawbone had a lot of money, but she could not win the market. The share of their bracelets at the best time barely exceeded five percent, in 2015 it fell below this value, and in 2016 the bracelets stopped entering the ten most popular . Nevertheless, when ordinary venture funds have already ceased to believe in Jawbone, in 2015 the state fund from Kuwait invested in it. He invested $ 165 million when assessing the company $ 1.5 billion.

Jawbone unsuccessfully tried to find a buyer. In 2016, the company wanted to be bought, and negotiated the absorption with Fitbit. Competitors did not agree in price-Fitbit was not ready to pay more than a billion dollars, and Jawbone did not agree to such a “low” rating, since the company previously attracted funding, based on estimates of $ 1.5-3.2 billion.

According to Reuters, state investment funds are increasingly investing in technological startups, but this does not always benefit - as in the case of Jawbone. Kuwait invested in a hopeless company, which has already lost to competitors Fitbit, Apple and others. As the partner of the Canvas Ventures Foundation notes, it is usually believed that if investors are invested in the company, this means that it is successful, but in the case of state investments, the situation is reverse. If the company is not invested in private investors, but state -owned ones, most likely, this is a risky asset.

The fact that startups burn out is a common thing, but as large as Jawbone burst very rarely. The company took second place in the bankruptcy list of the largest startups after Solyndra, which produced panels for obtaining solar energy. The company attracted more than $ 700 million from investors and received a state loan of $ 535 million, but still could not withstand competition with Chinese manufacturers.

Vladimir Tsybulsky