Investors like exits because exits are where they make their money. When a VC drops $5 million into a company, it wants to know that it’ll get double, triple, or 10 times that money back, preferably on the sooner side of never. 2015 was the year that funders started to see exits; 2016 will be the year that they’ll start to insist on it.
Fitbit, of course was the biggest jackpot; its IPO was a huge success by pretty much any standard. But acquisition is another way to exit, and there was plenty of them last year. Intel grabbed Recon Instruments and Vuzix. Misfit sold to Fossil. Clothing+ was bought by Jabil.
The net effect for all the purchased companies is to allow them to scale and meet what everyone believes will be rapidly growing demand. The bottom line, though, is that investors got their money out. And where some did, others may want to, too.
We’re now a good three years into the wearables revolution, which by some measures is hardly at the start and by others about time for it to start to pay off. We think that we’re about to see some big money guys refiguring their bets — some on the selling side, others on the buying side.
We think that by the end of 2016, we’ll have seen some well-known names in the wearable space — industrial and consumer both — swept up or swept out.
(See other parts of this series:
Wearables in 2016: On the Wrist. We predict segmentation and IoT integration.
Wearables in 2016: On the Face. We predict rapid adoption by industry and enterprises.)