Fitbit’s IPO is more evidence wearables have grown up

Wearable company Fitbit began trading on the New York Stock Exchange this morning, signaling the device maker had completed it move to go public. According to Forbes, the IPO raised $732 million for the company that’s trading with a market cap of $6 billion. What do those numbers mean exactly? Well, wearables, despite being niche devices and studies that show phones are just as good at tracking, are a big business that’s capable of raking in billions. To put it simply, wearables have grown up.

Fitbit’s IPO follows several quarters of steady revenue growth, including a $126 million increase in Q1 over the same period last year. If you’ll recall, the company announced a trio of new devices last fall, so that provided an extra push. What’s also interesting about Fitbit going public is that nowadays software startups and services are typically the ones making the move to be publicly traded. The decision to file for IPO is made less often by hardware companies. It’s particularly interesting for a wearable maker, especially when you consider a lot of folks buying them only commit to daily wear for a short time.

However, as Fitbit’s numbers show, there’s big money to be made in wearables. The company nabbed a personal training app to boost the experience for users and hiring a former HTC lead designer to guide product development. Of course, it’s also being sued by Jawbone for “plundering” sensitive product information and skin issues are an on-going problem. And if Jawbone has its way, Fitbit may face a sales ban in the US, which is sure to eat into those healthy valuation and sales figures.

Filed under: Wearables

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Source: Forbes