I joined Indiegogo’s Hardware Team because I’m a geek who can’t wait for the future. I get excited about products that bring my old sci-fi dreams to life, whether they were connecting my world, flying around with cameras, or creating giant mechs to race across the desert.
But it’s not just the hardware itself that changes. We’re also seeing companies using crowdfunding differently, and the future of crowdfunding is fascinating in it’s own right. I wanted to share a few of the trends we’ve seen emerge over the last few years.
Crowdfunding to capture investor attention
While hardware may have gotten early traction from companies that had no other access to capital, many hardware companies now see crowdfunding as an essential step in their equity raise as well. Investors often want to see that a product has strength in the market before they invest, and a successful crowdfunding campaign can help validate the market, de-risk a company for potential investors, and help hardware startups to gain much larger raises.
Many campaigns we’ve worked with have gone on to raise institutional rounds after crowdfunding. Jibo, who raised $2.3M on Indiegogo for a family robot, went on to raise an additional $25M in Series A funding less than 6 months later. Canary, who raised $1.9M in their Indiegogo campaign, raised a $10M Series A the following spring.
Gathering Data & Gauging Demand
The Paragon Induction Cooktop is in the middle of a very successful campaign for their cooking hardware that monitors food and water temperature directly, offering precise control of food temperature. The surprise? The campaign is run by Firstbuild, a subsidiary of GE. So why are they crowdfunding? In their words:
We get it. We are subsidiary of GE, so why are we doing an Indiegogo crowdfunding campaign?
FirstBuild is an open innovation hub that designs and builds new products for the home. Paragon is based on the input of dozens of our enthusiastic FirstBuild community members who want to see the product come to life. Crowdfunding on Indiegogo gives us the opportunity to validate that a cutting edge group of early adopters wants Paragon before we make hundreds of thousands of them.
Make sense? If you have any questions, you can always email us at email@example.com.
We’re seeing more campaigns from established brands who are using the power of crowdfunding to connect with their audiences. While crowdfunding was originally used in the hardware space by small companies who couldn’t otherwise produce their products, we’re increasingly seeing interest from larger companies who have financial backing but want to know more about their customers. That may be to discover which colors people are interested in, what features are most important, or even just how many units they should manufacture. Click here to see more examples of successful campaigns from established companies.
The visibility of a crowdfunding campaign can be leveraged for more than just raising funds in the moment. Knix raised over 150% of their original goal, and made over 2,000 pre-orders of underwear through Indiegogo. While this was a clear indication that there was demand, even more powerful was their ability to attract distributors. Hudson’s Bay contributed to the campaign for a first batch, and will soon be selling Knix Wear in their stores.
I’m excited to see new use cases emerging this year, and if you have something crazy you’d like to experiment with let me know. I’m always here at firstname.lastname@example.org.