Malmö smartwatch company Kronaby files for bankruptcy
Richard Orange - [email protected]
Published: 8 Feb, 2019 CET.
Updated: Fri 8 Feb 2019 10:09 CET
The Malmö company behind the premium smartwatch brand Kronaby has filed for bankruptcy after an abrupt shift in strategy at its Chinese backers.
The filing, made on Wednesday, puts 60 people at risk of losing their jobs at the company’s offices in the city’s new Västra Hamnen district.
Pål Borge, chief executive of Anima, told The Local that the company's majority owner, the Chinese electronics company Goertek, had decided to concentrate on their original business, component manufacturing, and shut down all of the brands they had begun to develop.
"They decided to leave this branding business, and they also decided to do it extremely quickly, so they shut off all capital injection and support with immediate effect," he said.
"They did this in December, so they left us one and a half months to find new investors, which was absolutely too short. We have a number of leads which we will continue to work on, but we have not been able to finalize them."
Pål Borge came to the company after Sony Mobile. Photo: Anima
Kronaby was founded in 2015 by four executives from Sony Mobile, and launched its first 'hybrid' watches in 2017, taking on Apple by combining high-end materials and stylish design with almost invisible smart hardware.
Revenues grew to over $50m last year, a 40 percent increase on the $37m worth of watches sold in its launch year, when it made a $127m loss.
The watches, which range in price from about 2,000 kronor (around $215) to about 6,000 kronor (around $647), were positively reviewed by style magazines such as GQ.
Borge said the company had aimed to reach break-even by the end of 2019 and had only required a small further capital injection of a few million dollars to do so.
"It was the final investment that could be done to make us break even," he told The Local. "The biggest disappointment was that it was notified in such a short time, so we didn't get a real chance to find a new investor."
Borge told Sydsvenskan that he hoped that the company’s administrators would be able to find a buyer or investor willing to come to the company’s rescue.
“We have a platform ready and a business which should interest many, so our ambition is, together with the administrator, to find a solution,” he said to the newspaper.
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The filing, made on Wednesday, puts 60 people at risk of losing their jobs at the company’s offices in the city’s new Västra Hamnen district.
Pål Borge, chief executive of Anima, told The Local that the company's majority owner, the Chinese electronics company Goertek, had decided to concentrate on their original business, component manufacturing, and shut down all of the brands they had begun to develop.
"They decided to leave this branding business, and they also decided to do it extremely quickly, so they shut off all capital injection and support with immediate effect," he said.
"They did this in December, so they left us one and a half months to find new investors, which was absolutely too short. We have a number of leads which we will continue to work on, but we have not been able to finalize them."
Pål Borge came to the company after Sony Mobile. Photo: Anima
Kronaby was founded in 2015 by four executives from Sony Mobile, and launched its first 'hybrid' watches in 2017, taking on Apple by combining high-end materials and stylish design with almost invisible smart hardware.
Revenues grew to over $50m last year, a 40 percent increase on the $37m worth of watches sold in its launch year, when it made a $127m loss.
The watches, which range in price from about 2,000 kronor (around $215) to about 6,000 kronor (around $647), were positively reviewed by style magazines such as GQ.
Borge said the company had aimed to reach break-even by the end of 2019 and had only required a small further capital injection of a few million dollars to do so.
"It was the final investment that could be done to make us break even," he told The Local. "The biggest disappointment was that it was notified in such a short time, so we didn't get a real chance to find a new investor."
Borge told Sydsvenskan that he hoped that the company’s administrators would be able to find a buyer or investor willing to come to the company’s rescue.
“We have a platform ready and a business which should interest many, so our ambition is, together with the administrator, to find a solution,” he said to the newspaper.
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