Jawbone reportedly shuttering business amidst financial turmoil, new health startup to rise from ashes

Jawbone, once a serious competitor in the wearables market, has begun the process of liquidating its assets, according to multiple reports on Thursday.

Citing a source familiar with the matter, The Information reports Jawbone is shuttering operation after years of financial pressure. The bluetooth headset-turned-speaker-turned-wearables maker faced stiff competition from the likes of Apple and Fitbit, the latter of which supposedly attempted to buy its rival last year.

Jawbone CEO and co-founder Hosain Rahman is transitioning to his new startup Jawbone Health Hub, a company focused on health hardware and software services. The newly founded firm will continue to service existing Jawbone devices. A number of Jawbone employees made the switch to Jawbone Health earlier this year, the report said.

A notice sent to creditors noted Jawbone entered insolvency proceedings on June 19. Jawbone enlisted the help of financial consultants Sherwood Partners to handle the liquidation process as well as the company's ongoing litigation against Fitbit. In 2015, Jawbone filed a lawsuit alleging Fitbit plundered trade secrets by hiring employees who stole confidential documents before leaving the now insolvent firm. Fitbit fired back with a patent infringement suit, but later withdrew the case after key IP claims were invalidated in court.

Rumors of Jawbone's imminent demise first circulated last May when reports claimed the company would temporarily halt manufacturing of its UP series of fitness trackers. At the same time, Jawbone was said to be in search of a buyer for its speaker business

Those claims were clarified earlier this year by TechCrunch, which reported Jawbone planned to pivot away from consumer wearables to high-profit clinical devices serving medical practitioners. At the time, however, it was assumed Jawbone would still exist as a company, a reality that has not come to pass.

A separate report from Business Insider claims Jawbone stopped producing fitness trackers last year, and stopped selling them directly to customers in September. The company sold remaining stock to a third-party reseller to generate revenue, the report said.

As for Jawbone Health Hub, existing Jawbone investor BlackRock received stake in the new enterprise, while an investor with no former ties to Jawbone injected an unknown amount of money for a majority stake in the venture, according to The Information.