will buy wearables company for $260 million, the companies announced last night. Fossil will keep the Misfit brand and product line intact and work with them to develop and release additional products in Misfit's pipeline. Misfit founder and CEO Sonny Vu will serve as president and chief technology officer of connected devices at Fossil, an executive-level position. The transaction will be funded through cash on hand and bank debt.
"We fundamentally believe consumers care about both technical functionality and fashionable design. In fact, one without the other is simply not enough. With the acquisition of Misfit, Fossil Group will be positioned to win with the connected consumer," Greg McKelvey, chief strategy and digital officer of Fossil Group, said in a statement. "Our world-class design and global distribution, combined with Misfit's technology platform, creates a significantly advantaged, multi-brand and global wearable technology business poised to drive the convergence of fashion and technology."
Fossil is a design and marketing company that already makes men's and women's watches. The Misfit acquisition is their first real foray into the connected wearable realm. The deal gives Misfit a much wider distribution reach, which could potentially allow the company to capture more of the fitness wearable market that's still currently dominated by Fitbit, at least in the United States.
"We are thrilled to join forces with Fossil Group to usher in the next era of wearables where elegance, beauty and long-lasting wearability are paramount," Vu said in a statement. "Together, we will introduce products that blend Misfit's seamless, intuitive technology and user experience with the design, style and branding that is the hallmark of Fossil Group."
At the end of 2011, Misfit caught the attention of the tech world because of Vu's pedigree -- he had previously co-founded Agamatrix -- and because of an early high-profile investment from former Apple CEO John Sculley. The startup went on to raise $7.6 million from the likes of Khosla Ventures before it even launched its first device. That device, the original Misfit Shine, raised a staggering $840,000 on Indiegogo, more than eight times its goal, though like many crowdfunding sensations, the company did have some trouble with shipping delays.
Today, the company has $62.8 million in venture funding. It recently released a new version of the Shine as well as a lower-cost tracker called the Misfit Flash. It also offers various ways to wear the Shine including socks, T-shirts, and a necklace called the Misfit Bloom. The company has notably partnered with Coca-Cola, which has used the Shine with employee populations, sleep tracking startup Beddit, and health insurance startup Oscar, which gave free Misfit Flash devices to its members and gives them discounts to premiums for using them.