
According to the folks over at TechCrunch, Silicon Valley venture capitalists are reportedly turning down requests from smartwatch maker Pebble for funding. This move as a whole is pointing toward speculation that the company may be struggling due to the launch of the Apple Watch. The company ended up obtaining a $5 million loan and another $5 million line of credit from a bank after several efforts to secure venture capital funding were all denied.
The alleged troubles come despite the fact that the company previously raised more than $20 million on Kickstarter for its latest model, the Pebble Time. This blockbuster crowdfunding success ended up amounting to the largest crowdfunding campaign in history. Though Pebble has found success as a startup, the total sales all pale in comparison to wearable devices sold by larger more established companies. For example, the estimated 700,000 devices that Pebble sold in 2014 helped the company earn a mere 7% of smartwatch profits with its low-end strategy.
The company’s strategy as a whole, which is to target the low-end of the fledgling smartwatch market may be a difficult path for Pebble to navigate as sources are indicating to TechCrunch that the company needs funds “in order to stay afloat.” The companies upcoming Pebble Time is set to take on the Apple Watch with a color, always-on e-ink display that offers up to 7 days of battery life before recharging. The Apple Watch in its current state needs to be recharged daily and touts an OLED screen which turns off when the device isn’t being used.
We’ll have to wait and see what happens but this is exactly what many had expected to happen once the Apple Watch was released. If Pebble doesn’t do something drastic though, the survival of the fittest saying may end up knocking the company out of the competition.
Source: TechCrunch
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