After cascade of troubles, Jolla may struggle to make due with Indiegogo backers

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Staff at Jolla will continue to live lean for at least the next year. And that’s only if the company’s financial problems don’t swallow them whole first.

The Finnish startup that sought to deliver a tablet with a fresh approach to mobile software has announced that it is “aiming for closure” in a blog post from co-founder Antti Saarnio this afternoon. It hopes to begin the deliverance of 540 Jolla Tablets to Indiegogo backers as well as refunding the thousands of other backers and first-party customers of the Jolla Shop starting in February.

Jolla will execute the refund process in two phases: one half of the contributors will receive their refunds by the end of March while the other half will get their payments back within a year, “financial situation permitting.” The payments will cover the full amounts contributed, including accessories and shipping fees.

The move comes as the company continues to deal with the aftermaths of financial and manufacturing issues.

The first components shipments sent to Jolla in the early summer of last year were deemed problematic. The company endured through these issues and kept to a tight production timetable. During the fall, the company’s supplier encountered its own difficulties having shifted factory sourcing twice. That ordeal ended up ballooning costs for the company. A financing round that would’ve helped pay subcontractors would not come until December. By then, Jolla had applied for debt restructuring and laid off a significant portion of its workforce. Further production of the Jolla Tablet was canceled.

While project costs have stopped piling up, there are questions as to how Jolla will acquire the capital needed to fulfill its customers.

As far as we know, the 540 units set to be sent out will be the second and last shipment of devices and will bring the total number delivered to customers to 661. Perks packages featuring at least one Jolla Tablet required a minimum contribution of $199. A document supposedly listing Indiegogo contributors who claimed a hardware perk contains 9,871 entries with many paying more than double the minimum amount.

Questions have also been raised as to why Indiegogo funds were used towards software development, which stood at half of the total project cost. Jolla stated that it had to convert its v.1 software meant for a phone for a new form factor, a new chipset and other hardware adaptations.

Sentiment from commenters on the news ranged from praise to skepticism and even interrogation. One customer said that they had purchased a Jolla Tablet case direct from a third party — leaving them without a refund.

The company is looking to vend its Sailfish mobile operating system to hardware manufacturers like Fairphone. But it will need to negotiate friendlier financing terms with its creditors in order to commit to further development, perhaps even the refunds.

Source: Jolla, contributors document
Thanks to Ted for tipping us off!

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About The Author
Jules Wang
Jules Wang is News Editor for Pocketnow and has been on the team since May of 2015. Before that, he was a production intern, editing and producing the Pocketnow Weekly podcast and also editing other video projects from the team. He is a Emerson College graduate of 2015 with studies in journalism.