Fitbit reportedly held talks to acquire Jawbone

As the patent battle between Fitbit and Jawbone neared its settlement, the two companies reportedly entertained talks around a potential acquisition. However, those discussions broke down, and Jawbone is now scrambling to raise funds to continue operating.

The Financial Times reports (subscription required) that talks were preliminary and came to an end when Fitbit suggested a price that “was a tiny fraction of Jawbone’s $1.5 billion valuation” from a year ago, when it raised $165 million in funding.

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Now that the potential marriage is out of the question, Jawbone has to figure out its financial future. The company faces pressure not only externally, but internally from its investors. Investment manager BlackRock put in $300 million and has reportedly indicated its desire to have Jawbone sold. The company has since hired an investment bank to enlist bids, but chief executive Hosain Rahman wrote in an email obtained by Fortune last year that no significant interest had arisen.

Today’s reports also indicate that things may be turning up a bit, as Jawbone could be close to securing funds from an undisclosed investor.

Had a deal gone through, it would have been another consolidation in the wearable market, joining Fitbit’s acquisition of European smartwatch brand Vector this week, of Pebble late last year, with Pebble’s subsequent shutdown. Of course, it would have also been interesting because for more than a year, Jawbone and Fitbit had been suing each other, alleging patent infringement and theft of trade secrets. Fitbit dropped the case involving the former issue near the end of December — a trial in the International Trade Commission had been scheduled for March. However, the case centered around trade secret misappropriation is set for trial this year in a California state court.

We’ve reached out to both Jawbone and Fitbit for comment and will update if we hear back.