Once rejected by the smart money in the venture capital world, Canadian engineer Eric Migicovsky just matched a fundraising record for startups launched on the crowdfunding platform Kickstarter.
The University of Waterloo graduate announced Thursday that his Pebble smartwatch project has secured $15-million in funding from George Zachary and Charles River Ventures, one of Silicon Valley's oldest venture funds (with about $2-billion under management according to Crunchbase).
Mr. Migicovsky became something of an Internet sensation in 2012, when his campaign to raise $100,000 to make 100 watches mushroomed into $10.3-million in pledges by 68,929 backers.
That initial surge was the largest sum yet raised by Kickstarter, a website that hosts appeals for cash for all types of projects (from theatre and comic books, to video games and even Hollywood movies).
Plagued by manufacturing delays, the firm now says it has shipped 70,000 Pebble watches to its original backers, with 15,000 outstanding.
In a new video, founder Mr. Migicovsky pivots slightly away from his original pitch, positioning the new Pebble as a long-lasting water-resistant sportswatch for active, on-the-go tech-savvy users.
In a blog post, the startup says it plans to ship upwards of 100,000 Pebble watches in the next year, and is taking on venture backing and expertise to meet its expansion goals.
In recent weeks another Kickstarter darling, Android-based game console Ouya, raised $15-million from a consortium of backers including Kleiner Perkins Caufield & Byers as well as the Mayfield Fund, NVIDIA, Shasta Ventures and Occam Partners. Until that point it was by far the most money invested in a company that got its initial boost on Kickstarter.
In an interview with The Globe and Mail, the then 25-year-old Mr. Migicovsky admitted that turning to Kickstarter was something of a last resort, after his prototype for a battery-sipping e-paper screen wristwatch – which also operates as a smartphone peripheral for notifications and e-mail – was rejected by venture capital firms.
"I found it very difficult," said Mr. Migicovsky. "Generally VC companies don't have much interest in investing in hardware."
It was a missed opportunity, admitted Chris Arsenault, managing partner of Montreal-based early stage venture funder iNovia Capital Inc., which was one of the companies Mr. Migicovsky had approached.
"What venture capital always wants is to get validation, and with Kickstarter, he could prove there was a market," said Mr. Arsenault.
Pebble also announced its plans to improve its developer kit so third-party software firms with iOS or Android apps can take advantage of the smartwatch's features.
With files from Wallace Immen, The Globe and Mail