Costco shoppers can find a wide array of items in one of the big-box retailer’s more than 500 U.S. locations. Now they can find Finder, too, the tracking device created by Bellevue, Wash.-based startup Pebblebee.
Co-founders Daniel Daoura and Nick Pearson-Franks launched Pebblebee four years ago. Along the way, the former Boeing engineers have created three devices, sold over a million of them, and raised just under $1 million mostly from friends and family. By focusing more on their technology and intellectual property than on marketing and brand image, Daoura and Pearson-Franks think the Costco deal signals big growth ahead.
“I believe Costco is one of those companies and retailers that if you’re selling at Costco it means that your product has been tested and is trusted by one of the biggest retailers in the U.S.,” Daoura said. “We’re very excited to be selling in Costco.”
It’s exciting for Costco customers, too, who will find a Finder two-pack on shelves for $29.99. That’s two for the price of one for members of the warehouse-style store only.
Daoura has first-hand knowledge of what that means, as he calls himself a “religious” Costco shopper.
“The majority of things I own were purchased form Costco,” he said. “I shop there several days a week and it has always been a dream of mine to sell our own product there. We are extremely fortunate to have such an amazing community of local investors that have helped support that dream.”
Pebblebee competes against Tile and Tracker in the product space designed for people who need help locating a set of keys or a misplaced purse. Both of those companies have raised more than $50 million through traditional funding and have sold many millions of units.
“I have so much respect for our competitors. It’s a really, really difficult landscape,” Daoura said. “Consumer electronics has been very difficult, especially if you look at hardware. We’re not VC backed and we’re a consumer electronics hardware company in Seattle, and so it’s definitely very, very hard for us, but it’s also hard for our competitors.”
But Pebblebee believes getting into Costco gets the small company on the radar. Finder will also be in the Costco Connection holiday gift guide, which has tens of millions of impressions in the U.S.
“The brand is going to start being more recognized, which is great,” Daoura said. “Obviously it’s great because we’re increasing our revenues and then that’s going to help us build new products that we’re rolling out early next year — very exciting products.”
The plan is to integrate Pebblebee technology into more items, similar to what’s been done with an arrow, for instance, created by a sports equipment company in Chicago. In that case, Pebblebee’s tracking tech is in the tail end, or nock, of the arrow, which blinks after leaving the bow and is trackable through the Pebblebee app to help users find an errant shot.
While Pebblebee will be cash-flow positive this year, Daoura and Pearson-Franks recognize the need to scale and grow and take on funding to do that. They say there is overwhelming interest from VCs now, and with the hope of signing on with more retailers, there will be challenges associated with paying for increased inventory.
“We’ve done our due diligence and we’ve grown the company to the extent we can without additional capital,” Daoura said. “So I think we’re now at a point where it might make sense for us to start growing.”