Misfit Raises $40M From Xiaomi And Others As It Eyes Extra Progress In China
Wearable gadget maker and well being and health platform supplier Misfit has raised a further $forty million in a Collection C funding spherical led by GGV Capital, and together with Xiao, JD.com (on-line retailer with large attain), Shunwei and present buyers, together with Horizons Ventures, Khosla Ventures, Founders Fund and Northwest Enterprise Companions. The brand new funding brings Xiaomi and JD.com on board as strategic companions, which displays a deepening of Misfit’s dedication to the wearables market in China, which presently drives a few third of its complete enterprise, in response to Misfit CEO and founder Sonny Vu.
“To us, [China] might be our favourite market,” he stated in an interview. “It’s a vastly bigger market, even once you think about revenue variations and what not. They’ve 1.7 or 1.eight billion individuals, and it’s an excellent essential marketplace for us. China’s all the time been a really strategic marketplace for us, as a result of we received there early.”
Xiaomi’s funding in Misfit is its first in a U.S. based mostly firm, and the 4-yr previous smartphone business titan appears to acknowledge the worth of getting Misfit on board as a companion, even though it already markets its personal wearable units, together with the $thirteen Mi Band. Vu says that there’s loads of room available on the market for each forms of units, and that low cost choices like these truly spur gross sales of extra premium hardware just like the Misfit Shine.
“The one that buys the $thirteen band could be very totally different from the one that buys the $one hundred Shine,” he defined. “The day that they introduced the $thirteen band, was the most important single gross sales day for us at Misfit. If it have been lightbulbs or tablets, then worth in all probability is extremely essential. I’m not saying worth isn’t necessary, however relating to wearables, style, design, model and expertise are extra vital elements.”
As for this spherical, Vu says that Misfit truly didn’t want the cash. The $15 million from their earlier increase continues to be within the financial institution, he informed me, and Misfit is definitely break-even because of its hardware gross sales. The entire firm is designed to be extra self-sustaining and fewer depending on outdoors funding than most, Vu says, due to his expertise operating earlier startups that ran out of money, which led him to take steps Misfit might construct its longterm imaginative and prescient (which fits means past wearable hardware, he says) with out worrying about operating out of runway. This spherical, then, was much less about capital and extra about securing key partnerships.
“This entire factor with Xiaomi and JD.com was principally carried out in order that we will actually amplify our presence in China, and in addition to speed up product improvement,” Vu stated. “We solely have forty individuals in San Francisco, so there’s solely a lot we will do yearly, and having a companion like Xiaomi who actually is aware of how one can scale and get to manufacturing shortly, and never simply them however the firm’s they’re invested in, that’s sort of an enormous deal for us.”
The deal may also see GGV managing companion and Xiaomi investor Hans Tung be a part of the Misfit Board of Administrators, and Shunwei founding companion Tuk Koh will even be a part of as Board Observer. Capitalizing on market potential internationally might assist Misfit proceed to work on lengthy-time period technique, whereas others flounder within the nonetheless nascent (and largely unproven) wearables market again in North America.