As Jawbone Opens API for Up Health Tracker, It Is Also Seeking $100 Million in Additional Funding
San Francisco consumer electronics device maker Jawbone will announce this week that it will be opening up access to its Up app software that will allow it to be used on other smartphones, watches and wearables.
Context & Ripple Effects
Jawbone's Up band has been the company's flagship consumer product since its November 2011 launch at $100, tracking activity, food intake and sleep cycles through a tightly coupled wristband-plus-app model. The capital behind that push has scaled fast, from the $40 million round backed by Kleiner Perkins and Deutsche Telecom in late 2011 to the February 2014 $250 million investment led by Rizvi Traverse at a $3.3 billion valuation.
Opening the Up app to third-party smartphones, watches and wearables marks a shift from selling a self-contained gadget to running a software platform across whatever hardware users already own — announced the same week the company goes back out to raise another $100 million on top of this year's round. The story drew wide pickup across Engadget, VentureBeat, SlashGear and other outlets within days, reflecting how closely the wearable ecosystem was watching Jawbone's platform move.
First-order effects
- Up's activity, food and sleep data becomes usable on smartphones, watches and wearables beyond Jawbone's own band, widening the app's addressable base without requiring buyers to purchase Jawbone hardware.
- Jawbone adds $100 million to an already large 2014 fundraising effort, signaling that scaling both hardware and now-platform operations requires capital well beyond what the February round provided.
Second-order effects
- Rival wearable makers face a choice between keeping their ecosystems closed and matching Jawbone's openness, since a tracker brand whose app runs everywhere competes on the band itself rather than on lock-in.
- Third-party device and app makers gain a major health-data destination, pushing accessory and watch vendors toward compatibility with Up as a distribution channel rather than treating it as a competitor's captive app.
Third-order effects
- If the pattern holds, the wearable market splits into hardware sellers versus platform owners, with durable value accruing to whoever aggregates health data across devices instead of whichever band sells best.
- Sustained mega-rounds for a single consumer-hardware startup point toward consolidation pressure in wearables, where only players with deep backers can fund simultaneous device, software and platform ambitions.
The trend: Wearable makers are evolving from single-device vendors into cross-device health-software platforms as the category's value migrates from hardware to data.