Fitbit files to go public, looks to raise $100M

Steven Loeb · May 7, 2015 · Short URL:

The wearables company saw $745.4 million in revenue in 2014, with net income of $131.8 million

2015 looks like it is going to be the year of the wearable, with over 45 million units expected to sell, more than double the number sold in 2014. One company is particular is going to take full advantage of this moment.

Fresh off making its first ever acquisition, scooping up digital health and fitness platform FitStar in March, and then adding $17.8 million in funding to its coffers, wearable device manufacturer Fitbit is ready to take its business to the next level, having filed its S-1 form with the Securities and Exchange Commission to go public this year.

The company says it is looking to raise $100 million in the offering. The company will list on the New York Stock Exchange under the symbol “FIT”.

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.

Of course, a lot of that is due to the impending release of the Apple Watch, which Fitbit did not shy away from in the filing.

"The connected health and fitness devices market is highly competitive, with companies offering a variety of competitive products and services. We expect competition in our market to intensify in the future as new and existing competitors introduce new or enhanced products and services that are potentially more competitive than our products and services," the company wrote.

"The connected health and fitness devices market has a multitude of participants, including specialized consumer electronics companies, such as Garmin, Jawbone, and Misfit, and traditional health and fitness companies, such as adidas and Under Armour. In addition, many large, broad-based consumer electronics companies either compete in our market or adjacent markets or have announced plans to do so, including Apple, Google, LG, Microsoft, and Samsung."

These competitors, it said, "may also be able to develop products or services that are equal or superior to ours, achieve greater market acceptance of their products and services, and increase sales by utilizing different distribution channels than we do."

Fitbit also said it could be hurt if its competitors discounted their products, but also detailed how it expected to compete.

"Our success depends on our ability to anticipate and satisfy consumer preferences in a timely manner. All of our products are subject to changing consumer preferences that cannot be predicted with certainty. Consumers may decide not to purchase our products and services as their preferences could shift rapidly to different types of connected health and fitness devices or away from these types of products and services altogether, and our future success depends in part on our ability to anticipate and respond to shifts in consumer preferences," it said.

 The 2015 IPO landscape

With 34 IPOs raising $5.4 billion, the first quarter of 2015 turned out to be the least active quarter by IPO count since the first quarter of 2013, and the smallest by proceeds raised since the third quarter of 2011. To compare: the first quarter of 2014 saw 64 deals, and $10.6 billion raised. The only major tech IPO of the first quarter was cloud storage company Box

Things seem to be turning around this quarter, though, with GoDaddy and Etsy both going public, and now with Fitbit, and e-commerce site Shopify also filing.

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