Jawbone Closes Rumored $250 Million Funding Round

2014-02-13_20-14-20

Jawbone is reportedly nearing a massive $250 million funding round led by noted tech-VC Rizvi Traverse Management. The round, which is rumored to be heavily oversubscribed, could push north of $300 million.

Suhail Rizvi, co-founder and chief investment officer of Rizvi Traverse Management, is expected to join the Jawbone board of directors as part of the deal. Rizvi, a notoriously reclusive Indian-born tech investor, entered the tech investment scene quickly, but is now compared to the likes of famed Russian investor Yuri Milner.

Rizvi contributed to funding rounds for Twitter, Facebook, and Square, the makers of a credit-card swiping smartphone attachment that drove a recent $5 billion valuation. He finally drew the attention of the tech world when it was revealed that he had grabbed an early 15 percent stake in Twitter which increased his worth by $3.8 billion when the company went public.

Founded in 1999 by CEO Hosain Rahman, Jawbone has raised $279 million in funding since its launch, and took on an additional $100 million in debt financing in September 2013. Adding the most recent $250 million and Jawbones total debt and financing top $600 million. The company’s valuation has skyrocketed in parallel with the growth of the fitness tracker market. The current funding round reportedly sets a value of $3.3 billion for Jawbone, up from a $1.5 valuation from 2011.

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Jawbone’s broad product portfolio includes both the Jawbone UP and the newly unveiled Up24, which was recently named one of the top 5 fitness tracker’s on the market. UP24 largely preserved the original UP form factor, adding a just new texture to the skin, but otherwise maintaining the dimensions and shape.

From a functional standpoint, the big enhancement that comes with UP24 is Bluetooth data synching. UP has optimized its iOS app to leverage that real-time data synching to deliver periodic fitness updates. From a metrics standpoint, the UP24 is still playing catch up with the rest of the activity tracker pack, as it still can’t differentiate between walking and other activities, so end of day caloric burn will be skewed for runners. It’s also only compatible with iOS devices, missing out on the quickly growing Android market.

Outside of fitness, the company markets a noise-cancelling Bluetooth hands-free device, and an incredibly popular wireless speaker. Across its product portfolio Jawbone is reporting a $600 million forecasted revenue over the next 12 months.

The company has been tied to recent rumors of an impending Google acquisition that would seem unlikely given the recent funding round. There have also been IPO rumors for some time now, but again, the latest funding round suggests that Jawbone may continue to develop its product line before making any major strategic changes.


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