Ossic, the startup that promised high-end pairs of 3D headphones, is shutting down after raising almost $6 million from crowdfunding.
The company is the latest in a growing list of crowdfunding failures, with most backers not receiving anything from Ossic after its closure.
What Happened To Ossic?
Ossic took tens of thousands of preorders for the Ossic X headphones, which were high-end head-tracking 3D audio headphones that were meant to be used for virtual reality. The start-up was able raise $2.7 million on Kickstarter and $3.2 million on Indiegogo.
There were over 22,000 preorders for the Ossic X until January 2017, but it was not until this January when the start-up was able to roll out the first units of the headphones to the 80 backers for its $999 developer tier. Unfortunately for the rest of the backers, it appears that the long-awaited Ossic X headphones release date will never happen.
In a letter posted on the official Ossic website, the start-up revealed that it was shutting down and that it will not be able to deliver the remaining Ossic X headphones that it promised to its backers. Ossic blamed the slow adoption of virtual reality technology and the lack of success of other high-profile hardware start-ups for its failure to attract additional investments.
In addition, because it is out of money, Ossic said that it will not be able to ship out the preordered Ossic X headphones, as the start-up said that it needs an additional $2 million to produce the backlogs. There is also no mention that Ossic will refund its backers, which is typical for failed crowdfunding initiatives where contributions are considered as investments and not purchases.
Ossic Among Biggest Crowdfunding Failures
There have been several crowdfunding failures over the years, with one of the most high-profile ones being the $3.5 million Zano drone failure. The Kickstarter failure was so bad that the crowdfunding website launched an investigation into the flopped venture, which delivered only 600 out of over 15,000 promised and paid-for drones.
There was also the ZTE Hawkeye campaign, which failed to draw support after the self-adhesive, eye-tracking smartphone won a competition launched by ZTE for its next product.
Ossic, however, now joins the list of the biggest crowdfunding failures after raising a huge amount from backers. Making the Ossic shutdown an even bigger letdown is that it also received a "substantial seed investment" on top of the money that it raised from Kickstarter and Indiegogo. With crowdfunding representing half of its raised amount, Ossic was working with about $12 million but was unable to deliver the Ossic X.
Backers are understandably outraged at the turn of events and have created a Facebook page that plans to launch a class-action lawsuit against the people behind the start-up.