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The CEO of Whoop, a fitness band favored by athletes, claims victory over it Amazon After the electronic retailer pulled the plug on its line of Halo devices.
Amazon said last week it was discontinuing its Halo health and fitness devices, and shutting down the Halo program, which has led to some staff being let go. The move coincides with a broader effort by CEO Andy Jassy to rein in costs amid a worsening economic environment and slowing retail sales. The company initiated the largest layoffs in Amazon history, corporate hiring freezes, and cancellations of numerous unproven projects.
Whoop CEO Will Ahmed said he views Halo’s demise as a win for his startup. Ahmed began contacting Amazon after it launched Halo in 2020, marking its first foray into wearables.
He claimed that the Halo wristband, which tracks users’ physical activity, sleep and mood, was a knock-off of Whoop’s own device. Whoop launched its first product, Whoop 1.0, in 2015. Ahmed aimed the device at athletes, drawing from his own experience as a former varsity captain at Harvard.
Ahmed said Amazon’s Alexa Fund approached Whoop in 2018 about a potential investment. The fund was launched in 2015 with an initial $100 million investment in companies that are innovating in voice technologies.
Ahmed says he “spent a lot of time with Amazon” and shared confidential information about Whoop. He was under the impression that there was a “firewall” between the company and the fund. But Ahmed alleges that as part of its due diligence process, the fund consulted with Amazon employees from other departments.
Amazon ultimately chose not to invest in Whoop and, two years later, unveiled Halo Squad.
“You look back now, or certainly once they released this knockoff product and you say to yourself, ‘Maybe we shouldn’t have done all that. Maybe we shouldn’t have been involved in this process,'” Ahmed said. “There are no hard feelings about it. I think my view on this is more fair, how can an entrepreneur learn from that?”
Amazon denied that it copied Whoop’s product, stating that there weren’t any legal claims the company had because of its concerns. Amazon also disputed Ahmed’s claim that the company uses information collected by its fund to inform product decisions.
“We do not use confidential information that companies share with us as an investor or potential investor, to build competing products,” Amazon spokeswoman Kristi Schmidt said in a statement. “For nearly 30 years, we have created many completely new features, products and even categories amazon.com Same for Kindle to Echo to AWS, few companies can claim a track record for innovation that rivals Amazon. “
This isn’t the first time companies have filed complaints of copying at Amazon. investigation by The Wall Street Journal In 2020, I discovered that Amazon appears to use the investment and deal-making process to help launch competing products, which often ends up hurting the companies in which it has invested, citing interviews with entrepreneurs, investors, and deal advisors. separate report from the magazine It found that Amazon uses data from third-party sellers to help develop its own branded goods.
Camera bag maker Peak Design made headlines in 2021 after it posted a YouTube video accusing Amazon of releasing a special item that copied one of its products.
Amazon also denied using non-public data from individual sellers to determine which private-brand products to launch.
Ahmed said the experience made him more careful about what data he disclosed when exploring potential deals.
“If a bigger tech company came to Whoop today, because we’ve built our own business and our own credibility and can really stand on our own two feet, we’d be exposed a lot less,” Ahmed said. “Some of that comes from having to learn from past mistakes.”
whoop in 2021 It raised $200 million in a financing round led by SoftBank’s Vision Fund 2, with a value of $3.6 billion. This valuation was determined in record time for project financing and IPOs. Investments in startups worth $1 billion or more nearly tripled in 2021 to more than 600, with the amount invested in those deals rising to $140.8 billion from $52.7 billion in 2020, according to National Venture Capital Association.
The venture capital market has since reset and the IPO pipeline has dried up, as investors have less appetite for loss-making startups. Several highly valued fitness startups have seen their valuations drop, including home fitness company Tonal which was recently valued at between $550 million and $600 million, down from roughly $1.6 billion in 2021, according to for the magazine. Stocks of an exercise equipment company peloton They have lost more than 90% of their value since 2021.
Whoop has continued to release new versions of wearable fitness, the latest being the Whoop 4.0, which includes the same basic sleep, heart rate, and breathing rate tracking, as well as newer features like stress monitoring and muscle pressure to help with weight lifting.
Also includes a warning shot for competitors. Engraved on Whoop 4.0’s circuit board are the words, “Don’t bother copying us. We’re going to win.”
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