Essential Products Inc., a billion-dollar startup co-founded by Android creator Andy Rubin, is on sale and won’t be launching its new device for the year any time soon. Reportedly, the company has already hired Credit Suisse Group AG as their sale adviser and has also found a potential buyer.
The startup came to limelight after unveiling its Essential phone, which gave rise to the idea of a near bezel-less phone with a cutout, or a notch, on its display. The phone soon had its own fan-base, but the company failed to settle as a top-end smartphone brand due to a higher price, issues with the OS at launch and some issues in the camera department.
Essential’s key investors include Amazon.com Inc., Tencent Holdings Ltd., and Redpoint Ventures, with a $300 million stake. The company was valued at $1 billion in 2017.
The company spent over one-third of its initial capital, around $100 million, for developing its current products but is now looking to hand over all of its employees, patents, projects, to a new overseer. Its key employees were hired from tech giants such as Google and Apple, and will also work under the new owner following the deal.
Upon query, the company declined to comment on whether Essential has canceled production for its upcoming smartphone. Rubin said in an open tweet,
We always have multiple products in development at the same time and we embrace canceling some in favor 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.
After the initial report, another leaked email showed that Rubin was unhappy with the leak and said that such leaks put the company in a bad position when it comes to fundraising. He said that “no one (including me at this moment) knows what the best thing for the company will be.”
He confirmed that Essential is not shutting down, and is instead “working with bankers to raise money.” An acquisition is also part of the discussions. “I’m going to focus on winning and not whining,” Rubin said.
Essential Phone PH-1
The Essential phone offered the latest hardware, packed in a unique titanium ceramic build with options to mount modules such as a 360-degree camera. It continued to face software and hardware issues, and took some time to stabilize its supply wing, causing severe customer service issues.
Its iteration for bezel-less display was adopted by Apple, for the iPhone X, which became a quick hit and gave popularity to the controversial notched display design.