Is Pebble on the rocks? Smartwatch manufacturer takes out loan to “stay afloat”

Despite a successful Kickstarter launch for the Pebble Time and Pebble Time Steel – one that broke records earlier this year for the fastest funded project – Pebble could be facing financial difficulties.

According to TechCrunch, Pebble has obtained a $5 million loan from a Silicon Valley bank, with another $5 million line of credit until they secure venture capital funding. Pebble managed to raise $20 million during its Kickstarter campaign, and the company is still hiring to swell its ranks beyond its 150 employees. So why the loan to “stay afloat”?

It seems that the pressure of the Apple Watch, alongside complications with Pebble Time’s shipping dates, has taken its toll on employee confidence. However, TechCrunch’s John Biggs claims that the employees he spoke to anonymously were “cautiously optimistic” about Pebble’s future.

Could Pebble landslide towards financial collapse?

Despite the doom-and-gloom rumours spouting from the mill, Pebble may not really have much to worry about.

After all, while you’re prepare to gain more funding, recruit more people and launch two new smartwatches, acquiring $10 million to bolster current finances isn’t such a bad idea.

Still, the timing of the loan – coming so soon after the launch of the Apple Watch – has raised suspicions about the company’s financial situation. Pebble CEO Eric Migicovsky certainly doesn’t seem worried. In fact, he lavished praise on Apple’s entry into the smartwatch market at this week’s Wearable World Congress in San Francisco.

“[People say there’s] a lot to learn from them, because it took them seven years,” he said, “but we don’t worry about that. We’re focused on keeping it simple, affordable and useful. Google has put forth a dozen different watches. Apple has put forth a high-fashion watch… and this is great.”

Pebble isn’t the only wearables manufacturer looking for financial help. Back in January, Wareable pointed out that Jawbone was also in a bad place, and only a few days ago it was reported to have taken out a loan to sustain itself.

In reality, it’s not too uncommon to see businesses relying on someone else’s money to get by, especially a startup with as much buzz around it as Pebble. A loan could be a good option for the company while it fulfils customer’s Pebble Time orders, giving it access to the funds it needs quickly and without the pressure to increase revenue for investors. If Pebble doesn’t manage to secure VC funding, then it may have to worry about its future, but for now it’s unlikely we’ll see Pebble turn to rubble any time soon.