Fitbit looking to raise as much as $478 million in IPO

Fitbit home

Fitbit is shooting for the stars with its initial public offering as it is looking to raise as much as $478 million and bring its valuation to a sky high $3.3 billion. This, of course, presumes they manage to sell all of the planned 29.85 million Class A shares for $14 to $16 apiece.

Fitbit has brought in $745 million in revenue last year, $100 million of which were net income.The fitness band maker is already profitable, having brought in $745 million in revenue last year, $100 million of which were net income. Still, the company is facing competition from a number of giants, including Apple, Google, Microsoft, Jawbone and Samsung, as well as emerging players from China like Xiaomi. Also, Fitbit has to convince potential investors that despite the fact that a third of smartwatch and activity trackers are abandoned after six months of use, new customers will keep coming in.

To tackle this competitive pressure, the company will be launching additional products and services, increase marketing efforts, expand distribution globally and build relationships with corporations for employee wellness programs. The money raised from the IPO will go towards research and development, sales and marketing, capital expenses and potential acquisitions.

Fitbit will have two classes of shares after the offering, with Class B representing 10 votes and Class A providing one vote per share. Morgan Stanley, Deutsche Bank and Bank of America are managing the offering. The stock will be listed on the New York Stock Exchange under the symbol FIT. Foundry Group, True Ventures and SoftBank are current investors in Fitbit.

[Via: Bloomberg]