Owlet pulls Smart Socks following FDA warning letter

Baby tech company Owlet has pulled its connected-sock wearables from the market following an October FDA warning letter that the company was out of regulatory compliance. The news, which was first spotted by Deseret News, comes less than a year after the company went public. 

The sock in question was designed to track an infant’s heart rate, skin temperature, blood oxygenation and sleep data. Currently the Owlet Smart Socks do not have marketing approval or clearance from the FDA. However, in the warning letter, the agency said that the company is currently marketing the product as a “diagnosis” tool, which would mean it needs a 510(k) clearance. 

Specifically, the FDA said that the baby socks “are devices because they are intended for use in the diagnosis of disease or other conditions or in the cure, mitigation, treatment or prevention of disease, or to affect the structure or any function of the body. Products that measure blood oxygen saturation and pulse rate are devices when they are intended to identify (diagnose) desaturation and bradycardia and provide an alarm to notify users that measurements are outside preset values.” 

According to the warning, the FDA has been in correspondence with Owlet since 2016 in regards to the classification of the socks. The FDA specified that the product does not fall under the compliance policy for low-risk products that promote a healthy lifestyle. 

WHY IT MATTERS 

Since hitting the NYSE in July through a SPAC merger, Owlet has had a rocky road on the public market. The company debuted trading for just under $10 per share. 

When the FDA letter was released in October, the stock fell by 31% in a day. The stock never fully recovered from this fall. As of today the stock is trading at just over $4.30.  

THE LARGER TREND 

Founded in 2013, Owlet gained attention in 2015 when it raised $6 million in venture funding and another $1 million from an NIH grant. As of today, the company has around $178 million in funding, according to Crunchbase

The company has branched out beyond wearable socks to include a baby-monitoring camera and a digital sleep-training program. 

Owlet isn’t the only company in the baby-monitoring space. For example, Nanit, a smart baby-monitoring system, scored $25 million in February, bringing its total raise to over $75 million.  

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