Fitbit plans IPO on $3.3bn valuation

Fitbit, the maker of wearable devices that collect data on exercise and sleep patterns, is seeking to raise as much as $478m (€428.2m) in an IPO.

Fitbit and its stockholders plan to offer 29.85m Class A shares for $14 to $16 apiece. At the high end of the offering range, Fitbit would be valued at about $3.3bn.

The company, which is based in San Francisco, is expected to price its IPO on June 17.

Fitbit is profitable, with $745m in revenue last year and over $100m in net income. Still, as it markets the sale to investors, the company must show them it can continuing growing despite heightened competition and the tendency for many users to stop using activity trackers after a few months.

A third of smartwatch and activity-tracker owners abandon their device after six months of use, according to a survey of 1,700 consumers by consulting firm Endeavour Partners.

Fitbit cites competitors such as Jawbone and Samsung Electronics, as well as Apple’s smartwatch, in its IPO prospectus.

Fitbit says its strategy to boost growth includes innovating more products and services, increasing marketing efforts, expanding distribution globally, and building relationships with corporations for employee wellness programmes.

The company plans to use the proceeds from the IPO for research and development, sales and marketing, and capital expenses and potential acquisitions.

Fitbit offers devices, ranging from €99 to €249 each, and offers products in more than 45,000 retail stores. The company was founded eight years ago by James Park and Eric Friedman.