Tech company that raised millions through crowdfunding shuts down, with most backers receiving nothing

A person wearing headphones.
(Image credit: Ian Waldie/Getty Images)

A tech company that received more than $3 million from supporters through Kickstarter and Indiegogo announced this weekend that it has run out of money, and thousands of people who pre-ordered their product — headphones with surround sound used for virtual reality — are out of luck.

Ossic sold 22,000 pre-orders for its OSSIC X headphones, which cost between $200 and $300, but only 250 backers ever received a pair. The headphones were an "ambitious and expensive product to develop," Ossic said, and "what made this project so exciting, and ultimately ended up being its Achilles heel, was the complexity and scope." Over the last six months, "dedicated" employees worked for free, "doing anything they could to try and make the company succeed," Ossic said, but it wasn't enough.

The company, which also received millions of dollars from angel investors, said it would need more than $2 million in additional funds to be able to deliver headphones to everyone who placed a pre-order. "Inventing something new while also developing complex hardware is expensive," Ossic said, adding that the "unknowns that come from ground-up development with so many new features ultimately stacked up to create delays and cost overruns." In 2016, Ossic said these headphones of the future would be able to sense ear shapes and customize sound for each person, Business Insider reports.

Subscribe to The Week

Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.

SUBSCRIBE & SAVE
https://cdn.mos.cms.futurecdn.net/flexiimages/jacafc5zvs1692883516.jpg

Sign up for The Week's Free Newsletters

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

Sign up
To continue reading this article...
Continue reading this article and get limited website access each month.
Get unlimited website access, exclusive newsletters plus much more.
Cancel or pause at any time.
Already a subscriber to The Week?
Not sure which email you used for your subscription? Contact us
Catherine Garcia, The Week US

Catherine Garcia is night editor for TheWeek.com. Her writing and reporting has appeared in Entertainment Weekly and EW.com, The New York Times, The Book of Jezebel, and other publications. A Southern California native, Catherine is a graduate of the University of Redlands and the Columbia University Graduate School of Journalism.