Crowdfunding and smartwatch pioneer Pebble Technology Corp. said it would close operations and stop selling its smartwatches because Fitbit Inc. is buying its intellectual property and hiring key personnel.

"We have made the tough decision to shut down the company and no longer manufacture Pebble devices," Pebble said in a blog post Wednesday, citing "various factors."

In 2012, Pebble, which was developing a smartwatch, turned to crowdfunding website Kickstarter Inc. to try to raise $100,000 as it needed new funding. Within 28 hours of being on the platform, Pebble raised more than $1 million from preordering customers. It eventually raised $10 million in that campaign and an additional $33 million across two others.

The success helped establish crowdfunding websites as a legitimate funding option for larger-scale funding needs and helped spark a wave of wearable technology competition. Its campaigns are three of the top four highest-funded ever on the Kickstarter platform.

The smartwatch and wearables space is now filled with alternatives from heavy hitters like Apple Inc., Garmin Ltd. and Samsung Electronics Co. Pebble is now a smaller player in smartwatches, controlling 3.2% of the market, according to research firm IDC.

Silicon Valley-based Pebble's products are known for its dedicated fans and third-party developers who made virtual watchfaces and apps for the device. In a post to its developer community, Pebble said it wants to drive a similar developer ethos at Fitbit.

Fitbit, which has recently struggled with slowing sales growth, said buying the intellectual property of Pebble and hiring some of its employees adds "deep industry expertise" and helps increase the pace of new product development and third-party apps.

The companies said the deal was completed Tuesday, confirming earlier media reports of a potential pact.

Pebble said it would stop taking new orders for its products and would refund the Kickstarter backers if they hadn't yet received their products.

Write to Austen Hufford at austen.hufford@wsj.com

(END) Dow Jones Newswires

December 07, 2016 11:25 ET (16:25 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.
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