Wearables deals reached their second-highest total ever in Q2.
Last week, one of Silicon Valley’s most well-funded unicorns announced that it would be shutting down and liquidating its remaining assets. Jawbone, a developer of consumer technology and wearable devices, received approximately $930M in total disclosed funding, reaching a private market valuation of $3.03B, before closing its doors.
But despite the recent news, wearable computing deals continue to grow. With over 521 deals and $4.58B in funding since 2012, the industry still seems to be attracting investors.
We define wearable computing broadly to include companies developing electronics devices worn or placed on the body and equipped with technology that can range from wearable medical devices to AR/VR headsets to GPS pet collars, among other examples. We include any company with a wearable product offering, even if their focus may go beyond the devices.
Using CB Insights’ data we dug into funding trends in wearable computing. This research brief covers:
Annual Financing Trends
So far, 2017 YTD (through 07/10/17) has seen approximately 78 deals worth $327M. Though 2017 deal flow is on pace to match 2016, funding is barely on target to exceed a third of the funding seen in the prior year. 2016 accumulated a staggering $1.855B over 149 deals, due, in part, to a $793.5M mega-round raised by Magic Leap in February of last year.
At the current run rate, 2017 is on pace to reach $628M in disclosed funding across 150 deals. Though annual funding has seen greater volatility in recent years, deals have been on an upward trend since 2012.
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The largest investment so far in 2017 went to Razer, a computer peripherals manufacturer that specializes in connected devices and software products, and also offers wearables products. Razer raised a $50M Series D in Q2’17 from Horizon Ventures. Hangzhou Liaison Interactive, IDG-Accel Capital, and Intel Capital also participated in previous rounds. The recent investment brings total disclosed funding for Razer to $175M.
Quarterly Financing Trends
Digging into the quarterly data, Q2’17 saw 41 deals, just one deal shy of the current quarterly record of 42 deals in Q4’16. The top deal in Q4’16 went to Osterhout Design Group, a developer and manufacturer of headworn computing technologies. Osterhout Design Group raised a $58M Series A that included participation from 21st Century Fox, O-film Tech Co., and Vanfund Urban Investment and Development Co.
Q1’16 remains as the record high quarter for funding with $1.18B invested, primarily due to Magic Leap’s $793.5M Series C. However, there were a number of other notable rounds during this quarter including a $165M round for Jawbone (a downround valuing the company at $1.2B) and a $75M Series C for Razer (an upround valuing the company at $1.5B). Razer’s most recent Series D, mentioned above, values the company at $2B.
Annual Financing Trends by Stage
Early-stage (seed & Series A) deals have accounted for over half of total deal share annually since 2012. Early-stage deal share in 2017 YTD is at 64%, down from a high of 69% in 2013, but on par with recent years. The top early-stage deal in 2017 YTD was a $14M Series A investment to Shanghai based Shawdow Creator, a developer of virtual and augmented reality devices. Investors included Everest Venture Capital, Fortune Capital, and Initial Capital.
Mid-stage (Series B & C) deal share has remained steady in recent years after an early high of 25% in 2012. Mid-stage deals have fluctuated between 12-18% of overall activity since 2013. While later-stage deals (Series D & E+) don’t make up a significant portion of deal share by series, “Other” deals (including convertible notes and other rounds) have ranged between 17-21% since 2014. Want more top Wearable Computing companies? Log in to CB Insights or sign up for free below.