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Fitbit sets IPO price at $20, raises $732 million

The wearable device manufacturer saw increased interest, despite a pair of lawsuits from Jawbone

Financial trends and news by Steven Loeb
June 18, 2015
Short URL: http://vator.tv/n/3e49

Wearable device manufacturer Fitbit is finally going public tomorrow, and it has raised a hefty sum of money in the process.

The company has set its IPO price at $20 a share, according to a filing with the Securities and Exchange Commission on Wednesday. 

With a total of 36.6 million shares sold, that means the company has raised $732 million in its offering. While that is nothing compared to something like the Facebook or Alibaba IPOs, which raised billions, it still makes this the third-largest U.S. IPO this year, according to the Wall Steet Journal. It also values the company at $4.1 billion.

Fitbit had initial set its IPO price at $19, which would have given it $695 million; by raising the price by $1, the company just made another $39 million.

Unlike some other companies that have gone public this year, Fitbit is currently profitable. The comapny saw $745.4 million in revenue in 2014, with net income of $131.8 million, up from $271.1 million in 2013, on a net loss of $51.6 million.

In all, Fitbit revealed that is has, as of the end of March 2015, sold over 20.8 million devices since its inception. More than half of those devices, 10.9 million, were sold in 2014, up from 4.5 million in 2013 and only 1.3 million in 2012.

Founded in 2007, Fitbit currently sells six connected health and fitness trackers, which "automatically track users’ daily steps, calories burned, distance traveled, floors climbed, and active minutes and display real-time feedback to encourage them to become more active in their daily lives," it says in the filing.

The company has raised just under $84 million in venture funding, from investors that included Qualcomm Ventures, SAP Ventures, SoftBank Capital,  Foundry Group and True Ventures.

As I said above, Fitbit is striking while the iron is hot, as wearable as on the verge of crossing over ina  big way this year.

In all, 19.6 million wearables were shipped in 2014, a number that will more than double, going up to 45.7 million units, in 2015. By 2019, total shipment volumes are forecast to reach 126.1 million units. That means it will have a five-year compound annual growth rate of 45.1%. Translation: you're going to start seeing a lot more wearables very soon.

The company has recently run into some legal trouble, with two separate lawsuits from its rival Jawbone, first alledgeing that Fitbit stole both talent and secrets; the company then accused Fitbit of patent infringement. Jawbone even said it would go all the way to the International Trade Commission, in an attempt to put a ban on Fitbit products being imported within the United States.

Apparently these lawsuits were not taken seriously by investors, as demand for shares of Fitbit have actually been going up, leading to the rise in IPO price.

(Image source: fitbit.com/flex)


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