Fitbit was among the early leaders in building connected portable health devices, a market that has become crowded in the last year with new rivals. Now Fitbit is announcing it has raised $12 million in a Series C round to help it fend off competition from emerging rivals.
Existing investors Foundry Group and True Ventures (see disclosure below) led the new funding round with participation from Lightspeed Ventures, SoftTech VC and Felicis Ventures. The new money, which comes on top of $11.4 million previously raised, will be applied toward hiring more hardware and software engineers, as Fitbit looks to build upon its growth. In October, it launched Fitbit Ultra, an updated version of its personal activity tracking device and then followed that up with the introduction this month of Aria, a Wi-Fi enabled scale that syncs weight, BMI and body fat data to a user’s Fitbit account.
Fitbit has faced a bunch of new competitors recently including Jawbone, with its Up wristband, Striiv, the Basis Watch, Motorola with its MotoActv watch and Nike with its FuelBand wrist device. Older competitors like Garmin, Muve and others are also very much in the mix. But Fitbit has managed to be among the top manufacturers, sitting at no. 2 on Amazon’s list of health monitor pedometers. The company’s products are now available in 5,000 retail locations including Best Buy, Radio Shack, REI and most recently Target.
James Park, Fitbit’s CEO, told me that in 2007, when the company launched, health devices catered to early adopters and gadget geeks. But now, the devices have gone mainstream as consumers look to track and manage their health using connected devices.
The inclusion of wireless connections, mobile devices and social reinforcement and sharing have helped newer devices take off in ways older pedometers couldn’t. The challenge for Fitbit is to stay ahead of some very well funded competitors.
“With all new entrants, you’re seeing a Cambrian explosion in approaches,” Park said. “It will be up to market to decide what works. But we’re pretty confident in our approach based on consumer and retailer acceptance.”
He said the key will be who can not only track all the data but effectively help users to use the information to reach their health goals. Fitbit is trying to expand its reach by adding richer data like the information gathered through its Aria scale, the first new product offering after its original device. Park was quiet on what other products Fitbit is working on but he said that users can expect to see more premium coaching and analytics services added over time.
I agree, that will increasingly be where the battle is fought. More and more devices will be able to capture data pretty accurately but the battle will be won by companies that can really put it all to work in a very intelligent and usable way. Eventually, we’re going to be surrounded by sensors monitoring our sleep, heart rate, galvanic skin response and other data. But just like with Big Data, the real money will be made in analysis.
Disclosure: Fitbit is backed by True Ventures, a venture capital firm that is an investor in the parent company of this blog, Giga Omni Media. Om Malik, founder of Giga Omni Media, is also a venture partner at True.