Jawbone, the US-based wearable device maker backed by telecommunications company Deutsche Telekom that was reportedly once valued at $3bn, has initiated liquidation proceedings, The Information reported yesterday.
The move came after company co-founder and CEO Hosain Rahman formed a new company called Jawbone Health Hub which will concentrate on digital health software and hardware services, a person close to Jawbone told The Information.
Founded in 1999, Jawbone originally focused on portable Bluetooth speakers before pivoting to produce wearable fitness trackers.
The company had reportedly raised approximately $565m in equity financing and $393m in debt, but found the going hard as growth in the wearables sector failed to live up to expectations and rival Fitbit targeted it with a patent infringement lawsuit.
Deutsche Telekom invested in the company as part of a $40m round in 2011 that included Kleiner Perkins Caufield & Byers, Andreessen Horowitz, Khosla Ventures, Sequoia Capital, investors advised by JP Morgan’s asset management division, and private investor Yuri Milner.
Jawbone had reportedly raised $147m of a $250m funding round in 2014 led by Rizvi Traverse Management that valued it at $3.3bn, but it did not close the round, instead securing $300m in debt financing from asset manager BlackRock the following year.
The company’s last funding was a $165m investment by the state-owned Kuwait Investment Authority in January 2016 at a $1.5bn valuation. Sherwood Partners is reportedly managing the liquidation process.