May 21–San Diego 3D headphone startup Ossic has run out of money and is closing its doors, leaving hordes of Kickstarter backers who forked over $2.7 million in pre-orders out of luck.
Ossic posted the news Saturday on its Kickstarter page, as well as on its website.
“It is with an extremely heavy heart that we must inform you that Ossic is shutting down and will be unable to deliver the remaining Ossic X headphones,” the company said.
“The Ossic X was an ambitious and expensive product to develop. With funds from the crowdfunding campaign, along with angel investment, we were able to develop the product and ship the initial units. However, the product still requires significantly more capital to ramp to full mass production, and the company is out of money.”
Founded by former Logitech engineers Jason Riggs and Joy Lyons, Ossic developed new headphone technology that blended advanced 3D audio algorithms, anatomy sensors and head tracking technology to deliver richer, directional, realistic audio. Its sensors and algorithms provided sound based a user’s head size, ear shape other physical characteristics.
Ossic participated in San Diego’s EvoNexus incubator program and was accepted to Abbey Road Red, a six-month music technology incubation program at the famous Abbey Road Studio in London. It employed as many as 20 people at its peak.
It is unclear how many of the 10,265 customers who pledged between $200 and $300 for Ossic X headphones won’t be receiving them.
But the company said on Kickstarter that it completed and began delivering only about 250 production headphones.
The company, which said it would take more than $2 million to fund the remaining backlog, tried to raise additional capital, contacting 150 potential investors.
But it was unsuccessful. Crowdfunding made up about half of what Ossic had raised since it was founded in 2014. Angel investors funded the rest.
“To fail at the 5 yard-line is a tragedy. We are extremely sorry that we cannot deliver your product and want you to know that the team has done everything possible including investing our own savings and working without salary to exhaust all possibilities,” the company said.
Kickstarter backers weren’t sympathetic, based on comments posted on the Ossic Kickstarter page.
Some have started a Facebook group where backers can sign up to participate in a potential a class-action lawsuit.
“It is very unfortunate to hear that you will be completely shutting down. I will say, however, I do feel more than a little disheartened that after pledging a significant amount of money towards a great project, to be held in waiting for two years, only to now be told ‘Sorry, we are closing up shop, you won’t be getting what was promised to you or anything else,'” wrote John H. Abbott in one of the more charitable comments.
The slower than expected uptake of virtual reality, coupled with the failure of certain other hardware companies, made it difficult to raise additional money, said Ossic. It also blamed high development costs as it sought to tailor the headphones for the mobile market.
This article provided by NewsEdge.