Red flag for crowdfunding: the Kreyos smartwatch is another failed project, this time costing $1.5 million of backers' cash

Crowdfunding has seen booming growth in the past few years with websites like Kickstarter and IndieGoGo attracting massive amounts of money and the most popular projects there gathering millions of dollars. Remember the Pebble smartwatch? One of the most successful Kickstarter campaigns, it raised more than $10 million in funding, becoming a hit and is now one of the most popular smartwatches.

However, it’s not all roses in crowdfunding land, and many people are starting to wave the red flag after wasting their hard-earned cash on projects that fail miserably. Kreyos is a particularly sore recent example. A brand new company founded by someone with obviously no prior experience, Kreyos promised IndieGoGo backers “the only smartwatch with voice & gesture control” and asked $100,000 for that. Instead, it got more than $1.5 million, with enthusiastic backers hoping for a futuristic smartwatch.

However, the big promises in the initial campaign quickly started changing. The July 2013 campaign promised the Kreyos Meteor smartwatch to ship in just three months, in November 2013. Naturally, such a complicated product made by a rather mysterious, but likely small and (as it’d later turn out) inexperienced team, could not be made in three months despite all the promises that development and design have already been finalized prior to the crowdfunding campaign. Shipping dates slipped and backers only started getting the ‘futuristic’ Kreyos Meteor smartwatch this month, 9 months after the promised release date. Delays are now such a common part of successful crowdfunding campaigns that we’d be surprised to see one that ships on time, but what was worse with the Kreyos Meteor is the actual device that is currently shipping. Put simply, it’s awful.

Thanks to project backers Andrew Wright and Kenneth Larsen, here is a list of just some of the things that went wrong: 

At the end of the day, the $170 watch has turned out to be one big fraud. Users now cry foul, but comments are being deleted en masse by Kreyos on its Facebook page, and the company has even annexed and changed the terms and conditions of the campaign in an attempt to save its face. Refund requests are denied, and that has sparked the most outrage. At the same time, Kreyos has managed to stay rather anonymous, hiding behind just one public persona, founder Steve Tan, who - annoyingly - poses on social networks with his brand new Ferrari and bags filled with luxury brands. Even more annoyingly, IndieGoGo, the platform that hosted the campaign, is basically saying that users are to blame to have trusted this pipe dream in the first place.

Finally, the morals of this sad story of the Kreyos smartwatch and really of crowdfunding is one of caution. Promises to ship complex devices in no time from a company that you know nothing about, that does not even disclose the names of its developers, are most likely bogus. And you might be just better off spending those $170 on a good night out, or a real product that has been tested to live up to its promises.



1. frydaexiii

Posts: 1476; Member since: Dec 01, 2011

IndieGoGo isn't wrong...It's their own fault for trusting them in the first place. Kickstarter and stuff like these hold the same risk or even more as buying stuff online, if something goes wrong and the seller goes missing or just ignores you, you're gonna have to just suck it up, you'd be lucky to even get a quarter of what you paid back.

3. medtxa

Posts: 1655; Member since: Jun 02, 2014

they don't deliver their promise of course they are wrong and possibly just scam.

8. steedsofwar unregistered

How do people give away large sums of their money without a legal contract that if the stated product is just a brick then, the crowdfunding platform would fork the refund.

9. frydaexiii

Posts: 1476; Member since: Dec 01, 2011

Any promises, contract or not can be broken, you just have to trust that they don't, and when they do, you can't really do much can you?

4. medtxa

Posts: 1655; Member since: Jun 02, 2014

I thought you said kreyos isn't wrong

2. mixedfish

Posts: 1567; Member since: Nov 17, 2013

The reason why none of these products ever pass through real investors/publishers/manufacturers is because they have all been deemed crap. Unlike with investment pitches these online pitches you have no way you can judge the creator's character/background in person except for some glitzy youtube video which in all honestly is no different to the efforts of a scammer, of course it's going to look good and convincing. This is why I would never back any of these 'crowd-sourced' projects, if your project was so good you wouldn't need to scrape the bottom barrel to get it going, the good stuff always find investors without this.

7. 14545

Posts: 1835; Member since: Nov 22, 2011

That's not true either. There are plenty of reasons to seek alternative funding. That's not an excuse for the above, nor is it the rule. If, and I have yet to do so, I find something worth backing, and it is as fully transparent as it can be about the whole process, then I would have no problem funding. However, when you drop 170 on a promise, you're not the smartest cookie in the box. It's never good to speak in absolutes like you do here.

13. elitewolverine

Posts: 5192; Member since: Oct 28, 2013

the good stuff uses the stock market, which is millions of tiny penny up to 100$ investors. Kickstart is basically stock without the oversight of the market.

17. TheMan

Posts: 494; Member since: Sep 21, 2012

Not true. Private equity funds the good stuff BEFORE it goes public. As for Kickstart, that's wrong, as well. What these "companies" (I don't even know if I'd go that far in some cases) are doing is raising cash with little or no strings attached. There is no sale of ownership or loan transaction. If there were the SEC, along with the states' blue sky laws would come into play.

18. Garmac

Posts: 21; Member since: Jan 10, 2014

Not always true of course, Pebble is a perfect example of a very successful product that use crowd-funding for raising capital... And there are many other examples. It's up to you to sort them out and weed the ones that look shaddy. Same as investing in Stocks. Sometimes you win and sometimes you lose. It's up to you to do your homework and select worthy projects...

5. bdclark

Posts: 13; Member since: Aug 01, 2012

Misrepresentation to potential/current investors can be a dangerous thing, and posing with the Ferrari & bags of expensive clothing aren't helping. I know of a former CEO of a battery company that led several people to believe his battery was the next big thing, and sure fire investment. From what I understand, the battery had a knack for catching fire and burning a hole through the table it was on, and partially through the concrete floor below. He cashed out before all this came to light, and avoided any insider trading charges somehow. So yeah, he's had several threats against his life and now stays in a huge compound with 24/7 surveillance and is under constant protection of armed guards. It probably costs him a fair amount of money for a good night's sleep.

6. 14545

Posts: 1835; Member since: Nov 22, 2011

Ok, so this isn't as easy as it sounds. I mean just look at all the knockoffs to stick-n-find. Not even the ones by "bigger name" companies have been any good. Much less the original product makers that were funded, IIRC, on kickstarter. Also, you have successful ventures like pebble (not that I like smart watches), so this isn't an all or nothing kind of thing. However, you shouldn't be flaunting "riches" when you can't deliver a product you promised.

10. jimjam unregistered

If the large crowd funding company can't protect consumers from scams like this then the crowd funding concept will eeventually fail and we'll lose out on innovation from small entrepreneurs.

12. 14545

Posts: 1835; Member since: Nov 22, 2011

The only thing I think needs to be done here is for the indiegogo/kickstarters of the world to look into fraud charges when people act a fool. Like this guy is definitely doing. I mean when you get a million and a half and you can't provide something close to your initial target, especially when your funding more exceeded your expectations 15 fold, then you did something with the money..... And I think we all know what that is. I'm not saying that doesn't happen in normal venture funding, but it seems less likely given the oversight from those that gave you the money.

11. Augustine

Posts: 1043; Member since: Sep 28, 2013

Even seasoned venture capitalists hit only 1 out of 10, if that. Why do people think that there wouldn't be a down side at playing capitalist in an online funding site?

14. p51d007

Posts: 705; Member since: Nov 24, 2013

And had it paid's called taking a chance. Now, as far as the principal owner, I guess you could sue for fraud?

15. HildyJ

Posts: 342; Member since: Aug 11, 2012

I was one who 'backed' Smarty Ring on IndieGoGo. Backers contributed $300k for some renders and spec changes which would make it better but which, we were told, caused delays. The person behinnd it even started another campaign which took in another $100k for the next version of the ring. I guess Ferrari's prices have been going up. I should have known better. The successful projects I've backed were more art than technology. Still, the technology press deserves some blame. Too often crowd funded projects are promoted as if the product exists and imply that they may have even been seen/used by the author. (e.g.

16. TheMan

Posts: 494; Member since: Sep 21, 2012

It's clear that the average person has little notion about the risk involved in crowdfunding. I've stuck with other forms of private equity, avoiding at all costs Angel investing. But angel investing and more to the point RAISING capital for said investors is highly regulated. These blue sky laws are there to protect the investor. Does anyone know whether these websites skirt these laws?

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