Just as Kleenex has become a generic term for face tissue and Google for online search, Fitbit is fast becoming a byword for wearable fitness gear.
Quite a feat, considering the eight-year-old company’s colorful wristbands and clippable widgets jostle in a crowded market with devices made by the likes of Apple and China’s Xiaomi.
Fitbit’s IPO — the stock closed at $29.68, up almost 50 percent, in its trading debut on Thursday — underscores a growing craze for wearable technology and gives the company ammunition to defend its turf.
Fitbit is the first pure-play wearable fitness device maker to go public.
“There is a first mover advantage and their technology is very low cost,” said Bob O’Donnell, founder of market research firm Technalysis Research.
Fitbit said in its IPO filing it had an 85 percent share in dollar terms of the U.S. connected activity tracker market in the first quarter of 2015, citing data from NPD Group.
The company’s revenue almost tripled to about $745 million for the year ended Dec. 31. Fitbit reported net profit of $131.8 million, compared with a prior-year loss of $51.6 million.
The company raised about $731.5 million by selling 22.4 million of the 36.6 million class A shares offered. The stock was priced at $20 per share, above the top end of the expected price range of $17-$19.
Co-founders James Park, who is also Fitbit’s CEO, and Eric Friedman each own 11.2 percent of class B shares. Between them, they reaped about $31 million from the offering.
Venture capital firm Foundry Group Funds, which holds a 27 percent stake in the company, raised $130.3 million from the IPO.
The San Francisco-based company’s devices monitor a user’s fitness activity by tracking the calories burned or distance covered. Its cheapest gadget, Zip, costs $60, while the popular Surge watch is priced at $250.
In comparison, the cheapest Apple Watch, albeit much more than a fitness device, costs $349.
The Apple Watch is seen as Fitbit’s biggest challenger, but the lukewarm response to the device indicates that the iPhone maker has not been able to make much headway with fitness enthusiasts.
To be sure, Fitbit also faces rising competition from devices made by Jawbone, Misfit and Garmin.
The potential is huge. About 126 million wearable devices are expected to be shipped in 2019, representing nearly $28 billion in revenue, according to IDC. In 2014, about 20 million units were shipped.
While Fitbit controlled 45 percent of the fitness activity tracker market in the first quarter of 2014, its share slipped to 35 percent a year later when Xiaomi launched its Mi Band, according to Manhattan Venture Research.
Still, analysts expect Fitbit’s IPO to help boost brand awareness while giving the company financial firepower to win back market share.
Also, Fitbit generates only about a fifth of its revenue from outside the United States, giving it plenty of room to grow.
“Fitbit has taken brand awareness to a far greater level than competitors,” CLSA analyst Ed Maguire said.
Maguire does not expect any other pure-play fitness gadget maker to go public in the near term.
Misfit, whose products range from $49-$169, is not looking to list its shares anytime soon, Chief Executive Sonny Vu told Reuters.
Jawbone is the most likely candidate for a listing, analysts said, but even that is unlikely in the near term. Jawbone was unavailable for comment.
For now, the game is Fitbit’s to lose.
“Fitbit has made fitness more engaging and popular by introducing innovative products and essentially defining the space,” said Santosh Rao, head of research at Manhattan Venture Research.
(Reporting by Neha Dimri; Editing by Sayantani Ghosh and Saumyadeb Chakrabarty)
This article originally appeared on Recode.net.