Jawbone rakes in another $40M despite mass refund offer

Kleiner, Deutsche Telekom, Yuri Milner invest in mobile health company after product flaws found

Despite some serious debut flaws and thousands of refunds offered just weeks ago, Jawbone has announced a new $40 million round of funding for its mobile health accessories.

The latest round of funding from several investors including Kleiner Perkins Caufield & Byers, Deutsche Telekom and Yuri Milner brings the total funding for the company to $210 million -- roughly $160 million for this year alone.

This funding, announced late in the evening Wednesday, brings the valuation of Jawbone to somewhere in the $1.5 billion range, according to the International Business Times.

Jawbone ran into some public relations and service issues in the last few weeks when users of its $99 UP wristband were reporting syncing, monitoring and use issues and the CEO, Hosain Rahman, issued an apology two weeks ago and a promise of full-refunds AND replacements to all those interested.

"We recognize that this product has not yet lived up to everyone’s expectations – including our own," Rahman wrote to consumers. "Jawbone remains deeply committed to addressing all issues with UP, investing in the category and giving our customers the tools to live a healthier life. We’ve temporarily paused production of UP bands and will begin taking new orders once these issues have been sorted out. In the meantime, we’ll continue to release app updates for existing users."

The refund program was launched on Dec. 9 and applies to any UP bracelet purchased from a Jawbone retailer in 2011.

The Jawbone was intended to track users activity and sleep patterns for accurate health and fitness monitoring that would then be synced any mobile iOS product where the UP app is downloaded.

Many early users complained that the UP wristband was not holding a charge, malfunctioning in the shower and having difficulty syncing.

This new substantial investment is a clear endorsement of not just the Jawbone products but the company's sincere loyalty to customers that are interested in their work. jawbone will use these new funds to globally scale its growth and, likely with the use Deutsche Telekom's experience, expand its mobile capabilities. 

"We are experiencing fantastic growth and the worldwide demand for our mobile lifestyle products and services is unprecedented," said Hosain Rahman, CEO of Jawbone, said in a statement. 

 The mobile health market is a growing industry with many challenges yet to be overcome. The mobile health market has been forecasted to exceed $400 million in the next four years.