A company that raised over $3 million through crowdfunding has shut down, and nearly everyone who paid for its $200 headphones lost their money

  • A high-tech headphone company called Ossic raised over $US3 million on Kickstarter and Indiegogo to build headphones with surround sound.
  • It sold 22,000 preorders for the headphones, which cost $US200 to $US300.
  • The company announced over the weekend that it was out of money and shutting down.
  • Ossic said it shipped only 250 headphones. Backers are not getting refunds.

Every time you back a crowdfunded project with your hard-earned dollars, you’re taking a risk. There’s always the chance it won’t work out.

The latest example of a Kickstarter failure is Ossic, a company making programmable “3D” headphones. It had raised $US2.7 million on Kickstarter and $US500,000 on Indiegogo, selling 22,000 preorders for its high-tech headphones, which cost $US199 to $US299.

Now the company is shutting down and will not deliver any additional headphones, it announced on its website. Backers will not receive refunds.

“We were not able to secure additional funding, and are out of money,” the website says.

Ossic XTech InsiderAn Ossic X prototype from 2016.

“The company is shutting down effective immediately,” the note continued. “We have a very dedicated team up [sic] folks who have remained for the last 6 months, working for free, doing anything they could to try and make the company succeed.”

The note mentioned that Ossic, based in San Diego, had also taken millions of dollars in seed funding from other sources.

Ossic ended up building only 250 pairs of headphones, mostly $US999 “developer units,” according to the company.

Ossic was founded to design a pair of headphones for virtual reality that could deliver surround sound. That meant they were somewhat more advanced than normal headphones – they had more sensors, chips, and software.

When Tech Insider covered the Kickstarter campaign in 2016, Ossic was promising headphones that would sense the shape of your ears and head and customise the sound profile for each user.


Tech Insider was even able to try a prototype of the Ossic X headphones.

“It’s like virtual reality for audio,” Tony Villas-Boas wrote.

The headphones were also able to track head position, which could have been exciting had it gone mainstream and allowed virtual-reality apps to build that functionality into their experiences.

Popular Science, Mashable, Game Informer, and other gaming and tech magazines and websites also covered the headphones.

Ossic Founding TeamIndiegogoOssic’s Jason Riggs, David Carr, Jose Arjol Acebal, and Joy Lyons.

Creating new hardware remains a difficult challenge. Companies need to master the complexities of Asian manufacturing and often need to plunk down millions of dollars in deposits just to secure factory time, all while developing a product that has never been done before.

At the end of the day, those challenges were too much for the Ossic team.

A Facebook group for angry Ossic backers has accumulated 1,800 members in 48 hours, according to the group’s administrator.

“I appreciate your participation in this group and I really hope we’ll achieve our goals – getting a significant refund from these a——s,” one admin of the group wrote.

A previous version of this story said that Ossic had raised over $US5 million from crowdfunding. In fact, it raised $US3.2 million in preorders from Kickstarter and Indiegogo combined.

Did you back the Ossic X crowdfunding campaign? Email the author at [email protected]

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.