There’s a May 16, 2013 report at the way-cool blog TechCrunch that Eric Migicovsky has landed a $15M investment from Charles River Ventures. The article includes an update of the now-famous Kickstarter campaign, stating that Migicovsky’s company is still working to fulfill the 85,000 orders they received via that crowdsourced fundraising effort.
If you’re not familiar with what I’m talking about, here’s a bit of background.
Migicovsky originally conceived of the Pebble and announced it through an online video in 2012. Click here to see the original video they made to raise funds at Kickstarter at Vimeo.
The original fundraising target he posted at Kickstarter was $1 million.
Raising funds through a crowdsourcing website like Kickstarter isn’t the same as raising money through a traditional venture capitalize or accredited investor. The U.S. Securities and Exchange Commission (SEC) doesn’t allow just anyone to sell stock to just anyone else. The reason is that the SEC theoretically wants to protect what they call “unsophisticated” investors from being financially hurt by reckless business ventures or charlatans. If you want to issue stock or solicit investment funds, you must recognize a number of legal disclosures and other regulations that often require an attorney to put together correctly. That can be expensive. Furthermore, your target audience may be limited to “accredited” investors, and most people don’t qualify.
To get around that, crowdsourcing sites like Kickstarter take a different approach. One way is to sell something to “investors”, so that they actually become customers, but with an understanding that the customers are purchasing something that may not deliver for a year or so. Furthermore, there’s a risk that the item might not be delivered at all, but in exchange for that risk, the customer is also potentially getting in on the ground floor of a great product and potentially joining the cutting edge of a new technical development.
Migicovsky offered his Kickstarter customers a chance to purchase a functioning Pebble. He had already made a prototype, and had determined that through mass production, he could afford to make them and sell them at $100 each, but only if he could sell at least 10,000 of them. So the Kickstarter campaign deal told would-be buyers that if they were willing to put up $100 to buy a Pebble now, and if at least 10,000 people agreed within a 30 day period, then everyone would be charged $100 at the end of the 30 days, and he would deliver the Pebble within a year.
That was his promise. The Kickstarter website would handle the payment collection and notification of all would-be customers. Migicovsky needed 10,000 customers to pledge $100 within 30 days, so he could raise the $1 million.
The Kickstarter campaign launched April 11, 2012. By May 18, the campaign had raised over $10 million.
It was the single largest amount ever raised through Kickstarter.
The big technology companies took notice. Apple announced plans to build the iWatch, with similar integration to other devices like the Pebble, and biometrics, for delivery in 2014.
But that hasn’t stopped interest in the Pebble. This month’s news about the $15M investment from Charles River Ventures underscores that fact.
The Pebble has a huge advantage on the software front. Migicovsky’s team is offering the Pebble with its own open software developer kit (SDK), which they’re calling the PebbleKit. The SDK enables “third party apps to send and receive data from the smartwatch” as quoted from the TechCrunch article. In addition, the “Pebble Sports API … enabl[es] developers to build GPS-enabled smartwatch apps similar to the RunKeeper app”.
TechCrunch also reports that the Pebble should be available via retail outlets in four to six months. If you’re keeping track, that means the Pebble will be available in plenty of time for Christmas 2013, while Apple’s iWatch might be available sometime next year, maybe. Perhaps. It could happen.
We’ll continue to keep an eye on Skere9 Star Eric Migicovsky. Stay tuned.