The failure of the San Francisco-based company is a reminder that unicorn valuations aren’t a guarantee of success. It also put a renewed spotlight on the wearables industry, a once-hot sector that’s taken a hit since its heyday. Founded in 1997, Jawbone was known in its early years for making hardware headsets and speakers—and later in its life, the company focused on wearable devices such as fitness trackers and related software products.
But the company's pivot to wearables didn't work out. Many media outlets reported earlier this year that Jawbone was looking to drop its fitness tracker line and concentrate on products for the health services industry, which seems to be the goal of Jawbone Health Hub, the new startup from Jawbone co-founder Hosain Rahman (right).
Jawbone’s break with wearables and ultimate death isn’t all that surprising considering the state of the wearables market as a whole. The company’s biggest valuation—$3.2 billion—was recorded in 2014, when fitness trackers and related products were on an upswing. That year, VC investment in the space reached nearly $500 million, per the PitchBook Platform, a figure that was eclipsed just slightly in 2016 before taking a nosedive so far in 2017.
Here’s a closer look at VC investment in the wearables industry since the beginning of the decade:
As is evident from the data, this year is on pace for a drop both in deal count and capital invested in the wearables sector. Jawbone isn't the only company that's felt the strain: Smartwatch maker Pebble was acquired at the end of 2016 for a reported $23 million, a serious dip from the $740 million takeover offer it was said to have spurned a year earlier. Fitbit (NYSE: FIT), a leader in the wearables market that acquired Pebble, isn't doing so great itself. The company's stock reached a high of nearly $48 per share in mid-2015 but has since plummeted to $5 per share.