Fossil Acquire wearable tracker fitness startup Misfit

The fitness tracking wearable startup, Misfit will be acquired by Fossil Group in a $260 million deal. Fossil Group which also own an array of other brands in its holding such as Michael Kors, Diesel and DKNY bought the startup as Fossil is slowly venturing into the fitness sector.

According to Fossil Group, the deal will be paid in cash on hand and will also cover its bank debt based on a report by VentureBeat. Misfit, which has been making wearable fitness tracker since 2011 had released lots of products such as the Shine 2 and other smartphone related products.

With its sleek and minimalistic design, and at the same time low cost of production managed to grab the attention of Fossil Group. Fossil plans to "scale Misfit's technology across Fossil, Skagen and a targeted portion of its portfolio of 16 brands in 2016" according to the group's Digital Officer, Greg Mckelvey.

He also added that the company will combine its expertise in watch designing with Misfit to create a better product. Acording to Mckelvey, "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."

Misfit co-founder and CEO, Sonny Vu said that he is welcoming the acquisition as it will help to boost Misfit products since there are lots of competition in the fitness sector lately as reported by The Wall Street Journal. Vu, who will be joining Fossil as its CTO said that "If you don't have a brand it is hard to be legit in this space."

Misfit has been very successful with its product and it is regarded as a promising fitness products by some investors. Prior to its founding in 2011, the company managed to raise $63 million in investment through lots of investors such as Xiaomi, GGV Capital, and JD.com.

Although Misfit has been collaborating with many big player in both fashion and sports sector such as Speedo and Swarovski, it still unable to get bigger share of the market according to The Verge. Currently, Nike and Fitbit is the biggest player in the wearable fitness and with a new big player such as Apple planning to enter the market too, Misfit find it will be harder for the company to get recognition.

Fossil acquisition might be the first step for the company to enter into smartwatch industry which has seen an increase in demand after the success of Apple Watch. Besides Fossil, Tag Heuer had also enter into the smartwatch business and is expected to release more fashionable smartwatch to compete with Apple.