Andy Rubin’s Start-Up, Essential Products, Shuts Down

SAN FRANCISCO — Essential Products, a consumer electronics start-up founded by the former Google executive Andy Rubin, said on Wednesday that it was ceasing operations.

Once considered one of Silicon Valley’s most promising hardware technology start-ups, Essential had raised $330 million in outside funding because of the track record of Mr. Rubin, who is widely credited for creating Google’s Android smartphone software.

But Essential, which was once valued at $1 billion, has struggled. It released a premium smartphone in 2017 that did not gain traction and the company later scrapped plans to develop a smart home speaker.

Essential was also dogged by news about Mr. Rubin and the circumstances of his departure from Google. The New York Times reported in 2018 that Google paid Mr. Rubin a $90 million exit package after claims of sexual misconduct with a company employee were deemed credible. Mr. Rubin has denied the allegations.

In a blog post on the company’s website on Wednesday, Essential said it had developed a new handset, but that there was “no clear path to deliver it to customers.”

Essential’s decision to shut down illustrates the challenges facing consumer electronics start-ups. Unlike software companies, hardware firms need more capital to buy components and maintain inventory of their products. Some hardware start-ups have broken through with hit products such as smart home device maker Nest and fitness tracker Fitbit, but those companies were eventually sold to Alphabet, Google’s parent company, partly because of the challenges of running a fledgling hardware business.

This story is developing. Check back for updates.