FORTUNE — Just around the time the Pebble smartwatch started shipping in January 2013, CEO Eric Migicovsky and the rest of his team began thinking about their next big project. The Pebble was a good first device, but its casual sporty design left more than a few shoppers seeking a more versatile look.
“Some wanted it to be in a slightly different aesthetic package — a little more akin to a classical watch,” explains Migicovsky on the couch of a conference room in Pebble’s Palo Alto, Calif. headquarters. When we met, he was prepping to fly out to Las Vegas for CES this past weekend, where he’ll meet with new partners like Pandora (P), ESPN, and Mercedes-Benz, all of which are developing Pebble apps that will launch at the end of January.
That’s when Migicovsky pries opens a small, padded black suitcase and takes out Pebble Steel. Available for sale this week on the company’s site and shipping later this month for $249, think of it as a more refined, more versatile edition of the original watch.
The technology inside remains largely the same – the same waterproof 1.26-inch power-sipping screen e-ink display, the same five- to seven-day battery life — but everything on the outside is starkly different. The gorilla glass and stainless steel watch face is trimmer and smaller, with two distinct flavors — “brushed stainless” and “black matte” — each of which come with two bands: steel linked and black leather. The upgrade to better materials lends Steel a solid heft that just wasn’t present in its chunkier, plastic predecessor.
Also in development: an app store that will launch alongside Steel later this month. Over 3 million apps and watch faces have been downloaded, but until now, users have had to download those via third-party sites like MyPebbleFaces.com. The Pebble appstore will finally offer an official, central location for users to do that, with app categories like Games, Notifications, Tools & Utilities, and so on.
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Over 300,000 Pebble smartwatches have been sold in the last 12 months, and with Steel, Migicovsky and crew bet its classier looks will convince some forward-thinking shoppers to buy in and goose sales further. Although 2012 was lackluster for wearable computing, with some devices like Google Glass (GOOG) and Samsung’s Gear watch proving limited and rough, it’s estimated wearables could be a booming market worth as much as $6 billion by 2016. And given its solid early sales, Pebble stands as good a chance as any company to be a dominant player.
To call the last four years a thrill would be an understatement, says Migicovsky, a University of Waterloo engineering graduate who first dreamed up Pebble while he was out cycling one day and developed it as a school project. Wouldn’t it be great, he thought, if you could check texts, emails, call notifications, and other digital bits and bytes without whipping out that phone?
Certainly larger companies like Sony (SNE) and Motorola had already tried such devices, but few were as promising as the iPhone- and Android-friendly Pebble, and none had the buzz the startup generated when it raked in nearly $10.3 million in funding on Kickstarter, or 100 times the original amount Migicovsky sought. (To date, the company has raised over $25 million from backers that include venture capitalist Timothy Draper, entrepreneur Paul Buchheit and Charles River Ventures.)
For Migicovsky, those earlier days were both thrilling and frustrating. “When people think of us and they see our Kickstarter success, I think they overlook the fact that we’re a four-year-old company — not an overnight success,” he says, recalling the few times in 2009 he was forced to dip into his personal bank account to pay early employees, several of whom were friends who left their jobs to work at the startup. Now the company, which does not disclose its financials, employs 45 — up from 11 early last year — and holds Friday meetings over which Migicovsky presides to discuss what everyone is working on. Says Migicovsky: “If I had to go back, I wouldn’t change too much … I wouldn’t take back any of that time because it all contributed to Pebble.”