The smartphone company founded by Mr. Rubin, a former Google executive, struggled to win over customers.
Essential Products, the consumer electronics start-up founded by former Google executive Andy Rubin, announced on Wednesday that it is shutting down operations. Despite raising $330 million in outside funding and initially being valued at $1 billion, Essential faced challenges in the competitive tech market.
The company, once considered among Silicon Valley’s most promising hardware startups, struggled to gain traction. Its premium smartphone, released in 2017, failed to perform well in the market, and plans for a smart speaker were eventually scrapped.
Essential was also marred by controversy surrounding Andy Rubin. In 2018, The New York Times reported that Google paid Rubin a $90 million exit package following credible claims of sexual misconduct with an employee. Rubin has consistently denied these allegations.
In a blog post on Essential’s website, the company acknowledged developing a new handset but cited a lack of a clear path to deliver it to customers as a reason for ceasing operations.
Any potential buyout would have valued the company below its $1 billion valuation.
The person said
Any potential buyout would have valued the company below its $1 billion valuation, the person said.
However, interest waned, influenced in part by the risks associated with Mr. Rubin’s workplace scandals. In 2017, The Information, a technology news site, reported that he had departed Google following an inappropriate relationship with a subordinate. This revelation led to his leave of absence from Essential to address ‘personal matters.’
Essential attracted substantial funding from venture capitalists and notable companies, including Hon Hai Precision Industry Company, commonly known as Foxconn, and Amazon. The influx of funds was largely attributed to Mr. Rubin’s reputation as a visionary in the smartphone industry.
In total, the company secured $330 million in external funding, with significant investments from Access Technology Ventures, Redpoint Ventures, and Tencent, the Chinese internet giant.
Mr. Rubin, known for popularizing keyboard use on phones with the introduction of the Sidekick device in 2002, played a pivotal role in developing Android, eventually acquired by Google in 2005. Presently, Android software operates on approximately 80 percent of the world’s smartphones.
