Fitbit valued at $4.1bn after IPO

Third largest IPO of the year as shares go above expected prices
Fitbit valued at $4.1bn after IPO

Fitbit has pulled off the third biggest IPO of 2015, after raising more than $732 million from 36.6 million shares sold at $20 a pop.

That leaves the fitness tracking company valued at around $4.1bn - a figure that will rise if underwriters led by Morgan Stanley, Deutsche Bank and Bank of America Merrill Lynch purchase the 5.5 million additional shares that are subject to demand.

Back in May, Fitbit filed to go public, and the most recent estimated share price was touted as $17 to $19. stated, "Shares of the San Francisco company are generating strong buzz among investors, thanks to an increasingly rare combination for a technology initial public offering: A highly recognized consumer brand, strong revenue growth and annual profit."

The company has been the most successful of the new era of wearable companies, and in its IPO filing it revealed that it has sold around 21 million devices since 2011.

Essential reading: Fitbit Charge HR review

Sales have also picked up throughout 2014, making $745.4 million in 2014 alone, and $336.8 million in the first quarter of 2015.

"We pioneered the connected health and fitness market starting in 2007, and since then we have grown into a leading global health and fitness brand," claimed Fitbit in the original filing.

There have been bumps in the road, however. The recall of the Fitbit Force back in early 2014 due to rashes developing on user's wrists was damaging for the company, and those claims have not subsided with the replacement Fitbit Charge band.

With the company now public, it faces its biggest threat to date. Among the competitors listed in its public offering was Apple, and its Apple Watch is a clear indicator of where the future of fitness tracking is heading.

It's not just big name devices such as the Apple Watch. The addition of basic fitness tracking in new Swiss-made watches by Mondaine and Frederique Constant, means that increasingly, fitness-savvy buyers don't need to buy a dedicated band to track their steps, activity and calories.

Add to that, the Chinese company Xiaomi is now reported to be selling around a million of its $15 Mi Band trackers per month.

However, in the short term, Fitbit might see gains. The Apple Watch is doing a good job of putting the benefits of wearable tech on the map, and with the Fitbit Charge on sale for $129 compared to Apple's cheapest offering of $349, it will be seen as an affordable alternative.

The IPO certainly gives Fitbit security, but its next device will define its future.

1 Comment

  • BadDobby says:

    Interesting article:

    I was one of of those sold on the potential of the Fitbit Charge HR, but was quickly underwhelmed by the experience. 

    The app is the biggest culprit by not putting all the data collected into useful information. eg: Heart rate data just gives you the average resting heart rate for the day... it doesn't allow you to see what it was during certain times of day or what it was during a logged workout which would be of particular interest. It just shows how long you were in the fat burning zone / cardio / peak for the whole day. There's no granularity to the data. Likewise with the sleep data though it does pretty well automatically tracking your sleep.

    There are no motivational reminders to get up and walk, or if you're almost reaching your target metric like the Jawbone app does. Nor healthy eating tips or habits. Apparently the premium paid version will "motivate" you to move more but meh, it doesn't give more granularity to the data so being reminded to be more active isn't worth paying for.

    I was surprised to be one of those also to develop slight skin irritations from wearing this band. I've never had issues with any watch straps metal/rubber etc no matter how long I wear it for. And yes I wash and clean the strap, even alternate wrists....

    In the end I keep it to check my heart rate manually during certain times of day and for the silent alarm which is effective at waking me up.

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