Fitbit considers whether it should explore a sale
Fitbit has held discussions with investment bank Qatalyst Partners
A visitor uses a Fitbit Ionic watch at the IFA Electronics Show in Berlin, Germany, September 1, 2017. PHOTO: REUTERS
Wearable device maker Fitbit has been in talks with an investment bank about the possibility of exploring a sale amid challenges in successfully pivoting from fitness trackers to smartwatches, people familiar with the matter said on Friday.
Fitbit has struggled to gain a foothold in the smartwatch category, as Apple and Samsung have cornered a bigger share of the market with more sophisticated devices.
At the same time, Fitbit’s dominant share of the fitness tracking sector continues to be chipped away by cheaper offerings from companies such as China’s Huawei and Xiaomi Corp.
Fitbit has held discussions with investment bank Qatalyst Partners about whether it should engage with potential acquirers, the sources said.
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Fitbit has not yet decided to pursue a sale, and there is no certainty it will do so, the sources said. Qatalyst has been seeking to persuade Fitbit to explore its options for several weeks, arguing it could attract acquisition interest from Google owner Alphabet as well as private equity firms, one of the sources added.
The sources asked not to be identified because the matter is confidential. Fitbit and Alphabet said that it is their policy not to comment on rumors and speculation. Qatalyst did not respond to a request for comment.
Fitbit shares rose 22% to $4.48 on the news, giving the company a market capitalization of more than $1.1 billion.
Fitbit cut its 2019 revenue forecast in July, blaming disappointing sales of its newly-launched cheapest smartwatch Versa Lite. The watch is priced at $160, compared with the $200 the full version sells for. It can track workouts and heart rate but lacks features such as the ability to store music directly.
Fitbit’s fitness trackers monitor users’ daily steps, calories burned and distance traveled. They also measure floors climbed, sleep duration and quality, and heart rate.
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Fitbit, which helped pioneer the wearable devices craze, has been partnering with health insurers and has been making tuck-in acquisitions in the healthcare market, as part of efforts to diversify its revenue stream.
In August, Fitbit said it had signed a contract with the Singapore government to provide fitness trackers and services in a health program it said could reach up to 1 million users.
Fitbit in August also launched its latest smartwatch, Versa 2, adding Amazon voice assistant Alexa, online payments and music storage to the device’s capabilities.
Fitbit has struggled to gain a foothold in the smartwatch category, as Apple and Samsung have cornered a bigger share of the market with more sophisticated devices.
At the same time, Fitbit’s dominant share of the fitness tracking sector continues to be chipped away by cheaper offerings from companies such as China’s Huawei and Xiaomi Corp.
Fitbit has held discussions with investment bank Qatalyst Partners about whether it should engage with potential acquirers, the sources said.
Amazon starts hiring own drivers in German last-mile delivery push
Fitbit has not yet decided to pursue a sale, and there is no certainty it will do so, the sources said. Qatalyst has been seeking to persuade Fitbit to explore its options for several weeks, arguing it could attract acquisition interest from Google owner Alphabet as well as private equity firms, one of the sources added.
The sources asked not to be identified because the matter is confidential. Fitbit and Alphabet said that it is their policy not to comment on rumors and speculation. Qatalyst did not respond to a request for comment.
Fitbit shares rose 22% to $4.48 on the news, giving the company a market capitalization of more than $1.1 billion.
Fitbit cut its 2019 revenue forecast in July, blaming disappointing sales of its newly-launched cheapest smartwatch Versa Lite. The watch is priced at $160, compared with the $200 the full version sells for. It can track workouts and heart rate but lacks features such as the ability to store music directly.
Fitbit’s fitness trackers monitor users’ daily steps, calories burned and distance traveled. They also measure floors climbed, sleep duration and quality, and heart rate.
Fitbit unveils Versa 2 smartwatch with Amazon Alexa
Fitbit, which helped pioneer the wearable devices craze, has been partnering with health insurers and has been making tuck-in acquisitions in the healthcare market, as part of efforts to diversify its revenue stream.
In August, Fitbit said it had signed a contract with the Singapore government to provide fitness trackers and services in a health program it said could reach up to 1 million users.
Fitbit in August also launched its latest smartwatch, Versa 2, adding Amazon voice assistant Alexa, online payments and music storage to the device’s capabilities.