Skagen watch maker Fossil Group Inc. (Nasdaq: FOSL) is buying VC-backed mobile software developer Misfit Inc. for $260 million in cash.
Under the Shine brand, Misfit makes cloud-based programs for smart watches that are designed to monitor daily activities, such as fitness and sleep. Founded in 2011, the target has raised around $64 million from GGV Capital, Horizons Ventures, Founders Fund, Xiaomi, JD.Com, Norwest Venture Partners and Khosla Ventures. In addition to its Fossil and Skagen brands, Richardson Texas-based Fossil also licenses Michael Kors, Diesel and DKNY.
“With the acquisition of Misfit, Fossil Group will be positioned to win with the connected consumer,” says Fossil chief strategy and digital officer Greg McKelvey. Misfit founder Sonny Vu is joining Fossil as chief technology officer for its connected devices group. Fossil is funding the purchase through a combination of cash and debt.
Fossil has been looking for ways to expand in watch technology for quite some time. In 2014, the company partnered with Intel Corp. (Nasdaq: INTC) to work on developing products and left open the idea of the two investing in startups. Intel has previously invested in a handful of companies, such as Thalmic Labs and Basis.
Interest in wearable technology has been growing. Competitors include Apple Inc.’s (AAPL) iWatch, Tag Heuer Connected and Fitbit Inc. (NYSE: FIT), which went public earlier in 2015.