The wearable manufacturer Jawbone is quite successful these days. Among their popular products, one can find now Jambox wireless speaker and the Up fitness-tracking wristband. Surprisingly, even for them, the demand was very high this year, so the San Francisco-based company has raised $93 million in debt financing. The new investment was a necessity due to more consumer demand than they could handle.
$43 million were provided by Silver Lake and Fortress Investment Group (FIG) and the next $50 million is an asset-based loan provided by J.P. Morgan and Wells Fargo (WFC). This current boost of finance joins the $200 million the company has raised so far by initial VC backers: Andreessen Horowitz, JPMorgan Digital Growth Fund, Khosla Ventures and Sequoia Capital.
“We’ve been experiencing crazy sell-through demand, particularly since the relaunch of Up,” explains Hosain Rahman, Jawbone’s founder and CEO. “It’s been faster than anything we’d had before, and equity is not the most efficient way to scale all that. If you’re a software company with high demand, you just call Amazon (AMZN) and add more servers to your AWS account. But when you build a physical good, there is a lot more that goes into it – ordering materials, manufacturing, delivery… Debt is the most efficient way to finance that.”
All these investments come after a very busy few months for Jawbone, which has acquired companies like Massive Health and Bodymedia to give life to their vision for smart wearable devices.