Mobile

Headset maker Jawbone raises another $40M, bringing its total to $210M raised

Jawbone, the maker of Bluetooth headsets for cell phones and other cool hardware, announced today that it has raised $40 million.

That amount is one of the biggest raised by a mobile hardware company, but San Francisco-based Jawbone has always been ambitious. As we noted when the company raised its $49 million round earlier this year, you could say that “over-engineering” a headset has gotten Jawbone pretty far.

The company makes wireless Bluetooth headsets for cell phones, but its latest devices are more like motion-sensitive computers that you wear in your ear. The funding means that the company isn’t yet done beefing up the ordinary headset into something cool.

“We are experiencing fantastic growth and the worldwide demand for our mobile lifestyle products and services is unprecedented,” said Hosain Rahman, CEO of Jawbone. “This new group of investors – with their world-class expertise in mobile, consumer Internet and technology, and international markets – will help us achieve the next level of expansion.”

Jawbone will use the money to broaden its offerings and global presence. Deutsche Telekom will be Jawbone’s lead carrier partner for its European expansion.

The company (formerly Aliph) has launched several generations of its smart Bluetooth headsets and has pretty much turned the latest Jawbone Era device into a connected app platform whose features can be updated over time. It also provides caller identification by verbally telling you the name of who is calling you. To date, the company has raised $210 million. The new round came from Deutsche Telekom, Kleiner Perkins Caufield & Byers, Russian investor Yuri Milner, and investors advised by J.P. Morgan Asset Management. Other existing investors include Andreessen Horowitz,  Khosla Ventures, and Sequoia Capital.

Founded in 1999 by Alexander Asseily and Rahman, the company used advanced noise cancellation technology as the defining feature for its first headset launched in 2006. Touting “military grade” voice clarity, it sold the device at the hefty price of $120 when competing products sold for $40.

Jawbone billed its headset as sounding even better than listening directly to a phone. The better sound came from having three microphones built into the device. It also had a sensor that felt the movement of your jawbone and correlated that with your speech. Digital signal processing took the data, stripped out the noise, and then reproduced the sound. The noise was stripped out even when the user wasn’t talking. Jawbone said the speech turned out more intelligible, letting you hear the difference between a “p” sound and a “b” sound.

The company followed up with a smaller version in 2008. The third-generation headset, the Jawbone Prime, arrived in April, 2009, and the fourth-generation Icon (pictured above) model debuted in January 2010 with a web site where you could customize the device. The most recent version was the Jawbone Era with motion-sensing controls, multiple processors, and a free voice communication service. It also created its Jambox intelligent wireless speaker and speakerphone and Thoughts, a free mobile service that lets users play around with voice messages in a new way.

Earlier this month, Jawbone had to issue an apology and offer refunds to purchases of its Up health wristband after many users complained of issues with battery and synching problems.

All of these models have relied on a noise-cancellation technology dubbed Noise Assassin. And the Jawbone models became the best-selling Bluetooth headsets at retailers such as Verizon Wireless and Best Buy. The company’s surveys showed four out of five people preferred using Jawbone with a phone over using only a cellphone itself. Jawbone has 250 employees.

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