Wearable device companies have raised at least $38.5 million on crowdfunding sites Kickstarter and Indiegogo, and 3D printing companies at least $25.6 million, according to calculations by Matt Witheiler, general partner at Flybridge Capital Partners. The statistic includes more than 80 companies that have raised more than $100,000.
Among the best crowdfunded hardware companies are Misfit Wearables, 3D printing company Formlabs and biosensor company Scanadu, which raised more than $150 million in combined traditional venture capital funding. After raising $2.4 million in crowdfunding via Kickstarter in 2013, virtual reality headset maker Oculus VR had a glorious exit–it was purchased by Facebook for $2 billion in March 2014. Oculus’ headset is used to treat medical patients, MD+DIsays, demonstrating the array of applications that the industry can deploy to improve outcomes. (After all, Oculus is classified as a gaming company in Witheiler’s breakdown.)
Almost 10% of crowdfunded companies go on to raise venture capital, and crowdfunded hardware companies have raised at least $321 million in VC so far. One of the firms was wearable device company Sensoria, which had a $5 million Series A round.
“For us at Sensoria the crowdfunding campaign proved that there is a need out there for smart garments that provide virtual coaching capabilities in real-time,” CEO Davide Vigano told MD+DI. “It also provided us with a price sensitivity analysis that was important during Series A due diligence. Beyond that, the campaign provided us with great input on product design and proved the point that there is a need for smart garments with biometric sensing capabilities.”
Angel investor Diane Smith agreed that crowdfunding can help companies stay in touch with their customers. She told VentureBeat that “every entrepreneur needs a customer. When you’re still in the idea phase, talk to potential customers and see how much and how likely they would be to pay for your product or service. Also, don’t hesitate to use crowdfunding sites to figure out if your idea has commercial potential.”
Crowdfunding can be used to finance unusual products. The Skea (or Smart Kegel Exercise Aid) boasts a smartphone game called Alice in Continent that involves causing the video game character to jump at the right time by squeezing the device with the pelvic floor muscles. The games give the product an edge over competitor kGoal, which is also being funded via Kickstarter. Both devices treat urinary incontinence.
So far Skea has 484 backers who’ve pledged $52,000. Only companies that raised at least $100,000 were included in Witheiler’s calculations.