After nearly 2 years from their launch, Vector has felt it’s time to take a step sideways. The sale to Fitbit was first greeted with enthusiasm by the tech community from Romania.
The transaction was then treated with skepticism, especially because the smart watches market hasn’t shown very positive signs in 2016.
What made Vector desirable?
Launched by Andrei Pitis and powered by a $2 million seed round from the Gecad fund, Vector received immediate positive reactions, especially because the battery has a lifespan of 30 days, well above the norm of the smart watches available on the market.
“Today, we are happy to announce that the Vector Watch team and our software platform are joining Fitbit, the leader in the connected health and fitness market!
We believe this is an important milestone as a moment when we will start building other new and amazing products, features and experiences, incorporating our unique technology and knowhow with Fitbit’s experience and global community“, says in an official statement published on the Vector website.
Undisclosed price
Although we don’t exactly know the details of the transaction, sources are talking about numbers around 12 million dollars. Which is approaching the amount invested over time in Vector.
This is the second major purchase for Fitbit within just two months: on December 7th, 2016, Fitbit officially announced that they acquired assets from Pebble.
- In the first 9 months of 2016, Fitbit recorded revenues of 1.595 billion dollars
- Net profit for this period was 43.5 million dollars.
Even so, Fitbit shares have closed at $7.33, down to 5.91% from the previous day after the announcement of the Vector acquisition.
Smart watches market prospects
According to a report from IDC, smart watchs sales experienced “significant” declines in the third quarter of 2016, as total shipments were down 51.6 percent from the same time last year.
Just 2.7 million units were shipped in Q3 2016 versus 5.6 million in Q3 2015.
- Fitness wearables represent 85% of the market
- Fitbit has about 70% of the wearables market
Below, you can see the Top 5 Wearable Device Vendors, Worldwide Shipments, Market Share and Year-Over-Year Growth, 3Q 2016 (Units in Millions):
- Source: IDC Worldwide Quarterly Wearable Device Tracker, December 5, 2016
Time will tell how profitable this business was for Vector. Until then, it’s important to note for those who already have a Vector watch that new product features (software and hardware) will not be added.
And yes, Vector was one of the important partners of ICEEfest 2016 🙂
