Essential Products, the company behind Android co-creator Andy Rubin’s Essential Phone, is reportedly up for sale following the cancellation of the startup’s next smartphone, according to a report from Bloomberg’s often reliable Mark Gurman.
The report states that Essential has hired Credit Suisse Group AG to advise on the potential sale, and that so far there is interest from one possible company. The company, which is part of Rubin’s incubator Playground Global, raised $300 million from various investors, including Tencent Holdings, Redpoint Ventures and even Amazon.
Roughly a year ago Essential was valued at a number ranging somewhere between $900 million to $1 billion, says Bloomberg.
Discussions involving the sale of Essential Products consist of the entire company, including its patent portfolio, hardware products and its relatively well-received smartphone, the Essential Phone. An unreleased smart home device, along with another camera attachment for the Essential Phone that isn’t the 360-degree accessory, are also included in the sale.
It’s also believed Essential’s engineering talent, which includes hires from Apple, Alphabet and Google, are part of the deal.
Essential’s first smartphone launched last August following a multi-week release delay. The phone aimed to beat Apple’s iPhone X to the market with a nearly edge-to-edge screen. While the startup was successful in hitting this goal and the Essential Phone was relatively well-received by tech reviewers — apart from issues related to the device’s camera — the device failed to gain traction with the average consumer.
In the Canadian market Telus offered the Essential Phone directly to its customers, though the device recently reached ‘end-of-life’ status at the carrier.
The phone’s price was also cut to $460 outright at Telus in late January. When the Essential Phone first came to Canada last September, Telus sold device for $1050 outright and $290 on a two-year Premium Plus plan.
When MobileSyrup reached out to Essential for comment, a spokesperson from the company said the following:
“We always have multiple products in development at the same time and we embrace canceling some in favour of the ones we think will be bigger hits. We are putting all of our efforts towards our future, game-changing products, which include mobile and home products.”
In an internal memo subsequently obtained by The Information, Rubin reportedly wrote to staff: “We are not shutting down the company.”
The article also stated that Rubin told employees the company “working with bankers to raise money,” and a part of that discussion might be the potential for acquisition.
Further, he discouraged future leaks, and said that further reports “will not position us well for optimizing.”
Update 5/25/2018: Article has been updated with information from a leaked internal memo obtained by The Information in which Rubin stated the company is not shutting down.
Source: Bloomberg
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