Hello, the makers of the bedside sleep tracker Sense, is shutting down as after looking for a buyer, according to a blog post from the company. The news was first reported by Axios, which said the company has laid off most of its employees and sought a buyer of its assets.
We’ve also heard that the details via Axios are on-point, including talks with Fitbit for the company’s assets with no outcome. We’ve also heard that some of the engineering team will — unsurprisingly — be headed to sleep startup Casper. That team will be part of the company’s San Francisco R&D team. Casper sells a wide portfolio of sleep products like the mattress, sheets, pillows, and of course a dog bed.
The company was valued between $250 million and $300 million in a financing round in 2015, when it raised $40 million in a round led by Temasek. The company raised $2.4 million on Kickstarter for its first product, but since then has tried to roll out new features like a version with voice recognition late last year. That last unit was priced at $149.
Hello positioned itself as a sleep tracker that you wouldn’t have to wear on your wrist, instead sitting somewhere in your room with a small tracker that fits inside your pillow. Sleep tracking has increasingly become a component of a lot of fitness and health tracking, with there even being a “Bedtime” function baked into iOS.
Hello also aimed to make its service equal parts software and the actual physical hardware. The goal would be to make sure users get to optimal sleep environments — whether with white noise or having a comfortable room — and try to keep those environments consistent and build up good habits around sleep.
Inevitably, though, these kinds of bedside hardware products face an existential risk from voice-powered assistants like Alexa and Google Home (and, soon, the HomePod). While these products aren’t necessarily branded around sleep, it doesn’t seem like too much of a leap to bring those kinds of features to things like the Echo and Google Home. It could turn out to be as simple as saying, “Alexa, please slowly turn the lights on at 7 a.m. and make sure I wake up.”
And hardware is a different beast than just creating an app that builds better sleeping habits. In August last year, the company said it would begin selling Sense at Best Buy and Target. That means that a startup like Hello suddenly has to grapple with complex problems like supply chain management and distribution, as well as the right marketing to ensure that people actually end up buying the tracker off the shelves. The company hired a new CMO from DoorDash in September last year.
I’ve reached out to CEO James Proud, an early Thiel fellow, for some additional detail and haven’t heard back yet. We reached out to Casper, which also hasn’t responded to a request for comment yet.