Direct-to-consumer wellness startups with a health bent are seeing big investments and growth. The momentum will likely continue in the year ahead.
The Skift Wellness newsletter is our weekly dispatch focused on what’s happening in wellness from a global business standpoint. Skift Wellness lives where wellness meets commerce, mindfulness meets technology, the yoga studio meets the boardroom, and health meets business.
It’s a good time to be a direct-to-consumer wellness startup. Why? The funding keeps rolling in. Take Curology, a direct-to-consumer skincare company founded by a mother-and-son dermatology duo. Not only has it received $17 million in venture capital funding, but it has tripled its consumer base in each of the past two years, Glossy reports. While the company currently focuses on personalized, prescription-strength acne medication, it’s now putting its attention toward anti-aging products, which will likely boost sales and widen the brand’s reach.
Meanwhile, Hims just got another injection of venture capital funding, to the tune of $100 million. The company now has a valuation of $1 billion, putting it in the unicorn club, though some are skeptical whether the valuation is truly legit. Still, there’s no denying the brand’s rapid growth or the fact that it has found a way to connect with men by offering wellness products that they actually care about (including erectile dysfunction and hair loss medication). We’ll have to watch and see what this valuation means for the company and if it will find similar success with its new women’s brand, Hers.
It’s hard to ignore the common thread with these companies: They each tap into telemedicine, which makes shopping easier for customers. It allows them to avoid the hassle of finding a doctor and helps personalize the buying experience. Utilizing this digital health trend may be one of the reasons for the success of these companies.
In other wellness startup news, Combe Incorporated, Vagisil’s parent company, just became the major stakeholder in Sustain, a women’s feminine care and sexual-health brand. Based on the buy in, it looks like Sustain will see more “sustained” growth in the year ahead. There’s little doubt Hims and Curology will, too.
— Leslie Barrie, Wellness Editor
Beauty & Spa
Direct-to-Consumer Skincare Startup Curology Expands to Anti-Aging Products: It seems like a smart next step. Curology, which lets customers virtually connect with doctors to get personalized, prescription-strength acne medicine, is now promoting anti-aging products as part of its lineup. The brand currently targets younger millennials, so this move would draw in older customers and expand its reach in a sizable way, especially given that the anti-aging category makes up a substantial piece of the skincare pie. It’s wise for Curology to appeal to as many beauty-minded consumers as possible to keep growth up. Read more here.
Vitamins & Supplements
Hims Becomes a Unicorn, Thanks to a $100 Million Investment: The direct-to-consumer wellness brand Hims (known for its phallic subway ads promoting erectile dysfunction medicine) just hit unicorn status with $100 million in venture capital funding, putting the company’s pre-money valuation at $1 billion. The startup, founded in 2017, now includes a women’s offshoot line, Hers, and has seen success with offerings that include hair-loss treatments, gummy vitamins, birth control pills for women, and more. This new $1 billion valuation, though, is twice as high as the company’s last valuation, which raises questions about whether the sky-high number really makes sense for the young company. Read more here.
Vagisil’s Parent Company Now Holds Majority Stake In Sexual Wellness Startup: It’s another example of a legacy company snapping up a buzzy wellness brand to keep itself relevant. In this case, 70-year-old Combe Incorporated, the owners of Vagisil, now holds a majority stake in the women-focused feminine care and sexual health startup, Sustain. The startup sells everything from organic tampons to period underwear, and the new deal could help the brand further its research and development, as well as grow internationally. There’s always a concern whether a small, edgy company will lose its identity with a buy like this, so we’ll see if Sustain can hold on to its brand DNA. Read more here.
Coffee Shops Capitalize On CBD Demands: Mamacha, a cafe and coffee shop in New York City, launched in April 2018. A few days later, it came out with a novelty CBD-infused drink to commemorate the 420 holiday –– and soon saw a line out the door. Now, half of Mamacha’s sales come from CBD drinks and products, and it sees no signs of that slowing down. Since the passing of the Farm Bill late last year, more and more coffee shops and bars have started adding CBD to their menus, though the legality of including it in food and drinks is still a gray area due to certain FDA restrictions. That likely won’t stop baristas and bartenders any time soon. Read more here.
This Shirt Can Now Track Your Stats: Who needs to wear a wrist tracker when your shirt can gather the data for you? Enter smart clothing, which can monitor everything from your heart rate, to your body temperature, to your breathing rate, and more. Hexoskin and OMsignal lead the category, while Supa and AmbioTex are also carving out real estate in the space. As we covered in our 2019 Wellness Megatrends, we expect wellness tracking to move beyond the wrist and into alternative wearables like rings and clothing tags. But we’ll have to wait and see how fast the smart clothing trend will take off –– and whether people are really ready to try these shirts on for size. Read more here.
Food & Drink
More Customers Are Turning Into Wellness-Minded Grocery Shoppers: Back in 2007, only 11 percent of customers considered a short ingredient list a sign that a product is healthy and good quality. By 2017, that number had increased to 20 percent, according to a new report from the Food Marketing Institute Foundation. Consumers care more about what’s in their products, which means brands are adapting their products to appeal to them and retailers are putting more items on shelves that align with this shift in demand. Plus, about 90 percent of food retailers now employ dietitians, according to the report, showing that nearly everyone in the sector has taken note of the wellness food trend. Read more here.
Skift Wellness Editor Leslie Barrie [email@example.com] curates the Skift Wellness newsletter. Skift emails the newsletter every Thursday.
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Photo Credit: A package of pills is shown. Many direct-to-consumer brands, particularly in the health and wellness space, are achieving high rounds of venture capital funding. @simonevdk / Unsplash
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