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Crowdfunded '3D' headphones startup Ossic shuts down; backers threaten lawsuit

ONE contender in the race to bring "3D" headphone technology to the mass market has dropped out of the race.

After taking thousands of orders for its high-end "3D" Ossic X headphones on crowfunding sites, audio startup Ossic announced over the weekend that the company is shutting down, with no mention that backers will be receiving refunds. 

"The Ossic X was an ambitious and expensive product to develop. With funds from the crowdfunding campaign, along with angel investment, we were able to develop the product and ship the initial units. However, the product still requires significantly more capital to ramp to full mass production, and the company is out of money," Ossic said in a note on the company's website. 

The company had raised US$2.7 million on Kickstarter and US$3.2 million on Indiegogo for its Ossic X headphones, which was pitched as "the world’s first 3D audio headphone that instantly calibrates to the listener, increasing the sense of auditory space, and acoustically recreating the way (people) hear the world every day". 

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While initial investment traction was strong, Ossic pinned the blame on the slow adoption of virtual reality, and the failure of several crowdfunded hardware companies as reasons that it made challenging for them to raise subsequent financing. 

The startup noted that it would take more than US$2 million to complete mass production of the remaining backlog.

According to a media report, Ossic built only 250 pairs of headphones after taking in tens of thousands of pre-orders and shipped them only to a few dozen Kickstarter backers. 

A group of over 1,200 backers who have not received their headphones are upset about this turn of events, and have created a Facebook group titled "Ossic X Class Action Lawsuit", threatening a class action lawsuit against the company. 

In January, Singapore-listed Creative Technology announced that it had found a way to bring "3D" sound to headphones, with its new Super X-Fi headphone holography. The technology is 20 years in the making, Creative said. The news revived interest in its stock, and Creative said that it plans to release Super X-Fi to the market this summer.