Ossic announced that it is closing shop. The company burned through its Kickstarter funding during product development and failed to secure investors to put the Ossic X 3D headphones into mass production.
A little over two years ago, the small startup launched a Kickstarter campaign to fund the development of 3D audio headphones for increased immersion in VR experiences. The Ossic X headphones were designed to offer a 360-degree sound space that accounts for the listener's anatomy and head position to mimic the sounds of a 3D environment.
We had a chance to try an early prototype of the Ossic X headphones, and we were impressed by the experience. Unfortunately, we won’t likely get to try them again, and the people who helped fund the project won’t either. Over the weekend, Ossic issued a final update to its Kickstarter backers. The company announced that it ran out of money and is shutting down.
Ossic was originally seeking $100,000 to bring the Ossic X headphones to market, but the company pulled in far more money than that. The Ossic X campaign reached its goal within 2.5 hours and ultimately raked in $2.7 million (that’s more the Oculus secured for the Rift campaign) and pre-sold close to 10,000 units. Ossic credits the high-demand for part of the company’s failure. The company said that the Kickstarter stretch goals to support tablets and phones with micro-USB and Lightning connectors stretched the company’s resources too thin.
Ossic also went through several product design iterations, which burned through the company’s bankroll faster than it expected. Ossic produced five proof-of-concept units (one of which we tried), four engineering/factory builds, and one pilot production unit. Ossic said the final design ended up being much more expensive to produce than the original concept. The finalized product featured eight playback transducers (typical headphones have two), six microphones, and multiple internal sensors. The Ossic X also included a 32-core processor for compiling the sensors information onboard.
Ossic ultimately produced 250 production units and sent hardware to the 80 people who backed the $999 Innovator/Developer package, but it doesn’t have the funds to ramp up to full production. And the company burned through more than the $2.7 million (minus Kickstarter’s cut) it received from the campaign. Ossic said the crowdfunding money is only half of what it went through: The company also secured private seed funding.
“Over the last 18 months, we have explored a myriad of financing options, but given VR’s slow start and a number of high profile hardware startup failures, we have been unable to secure the investment required to proceed,” Ossic wrote in it’s final Kickstarter update. The company said that its employees even worked without salaries for the last six months and dumped personal savings to help bring the product to life, but it was all for naught. The company suggested that it would require approximately $2 million to produce the units for Kickstarter and after speaking with over 150 investors, none were willing to take on the project. Ossic even shopped around for another company to take over where it left off, but they were either uninterested or unable to take on the financial burden to complete the Ossic X production.
Ossic’s management shuttered the company on May 19.