Led by Peloton’s flotation and Google’s purchase of publicly traded fitness wearables maker Fitbit for $2.1bn just before the coronavirus broke out, Tonal raised $110m from Amazon’s Alexa Fund and VC investors in September, while athletics clothing brand Lululemon acquired peer Mirror for $500m in June.
But their success has masked a decline in overall venture engagement with consumer electronics after a number of high-profile flame-outs, such as Magic Leap, the virtual reality wearables that had raised over $2.6bn, Essential, a mobile phone and device maker that raised $330m across two early stage rounds, and Anki, the maker of robotic toys.
Crunchbase even before covid-19 put one of the issues down to “the growing dominance of the ‘Big Four’ — Apple, Samsung, Google and Amazon. These corporate giants are cornering a growing number of consumer electronics categories, leaving startups hard-pressed to compete.”
Carl Benedikt Frey, director of the future of work program at University of Oxford and author of The Technology Trap, in MIT’s latest Technology Review magazine said large corporations are essential for progress, but only when they let the startups roam free. “Lately, the giants have gotten better at edging out smaller companies – a terrible omen for the future of progress.”
But improvements in the speed and reliability of 5G connections will enable live streaming, gaming, mixed-reality and cloud/edge computing and drive interest in hardware if combined with community and immersive experiences.
This should create the conditions for new startups to emerge.
After all, probably the dominant consumer electronics success story of the past decade has been the rise of Tesla in electric vehicles.
Corporate backed deals in Consumer electronics 2011-20
