The UK startup behind aconnected kegel exerciser called Elvie is today announcing a $6 million Series A round led by European VC firmOctopus Ventures. Female focused VCAllBrightis also joining the round, which will be used to expand sales tomoremarkets and build out its productportfolio, witha second deviceplanned for launch in early2018.
Tania Boler, co-founder of the London-based company, which was founded in 2013 working stealthily at first before decloaking to take pre-orders for Elvieback in November 2014 describes itsoverall focusas femtech, with the push and purpose for the team being to develop smarterproducts thataddress female health &wellbeing issues.
Such as, in the case of the current product, helping to build pelvic floor strength an issue that can affect women post-childbirth, leading to problems such as urinary incontinence. While a stronger pelvic floorcan haveadditional positives, with Elvietouting better sex as one of the potential lifestylebenefits, for example.
This does put the startupinto something of a category of its own in the hardware startup space,where wearable-makers arent typically building for such a single and specific (let alone female-focused) purpose. And where addressing womens needs most likely means some sort ofaesthetic concession such as wearables where the techis embeddedintoa piece of jewelry.
Its also fair to say that the consumer wearables space has not had the easiest ridein recent times. Even for veterans ofthe category likePebble,FitbitandJawbone whose co-founder, Alex Asseily, also happens to be a co-founder of Elvie there have been shut downs, job cuts and suggestions of b2b pivots.
But evidently its not all doom and gloom at least not for thisalternative wearable maker (the Elvie device is worn internally duringpelvic floor workouts). Even if it has taken Elvie a little longer than Boler originally anticipated to close the Series A.
The funding climate has changed since 2014 in general in Europe, but also particularly for wearable technology, she tells TechCrunch, discussing the raise. A lot of startups working in the hardware space, after a lot of initial excitement aroundthe hardware revolution and the potential of connected devices because thesuccess rate has not been so high, and actually particularly female-focused wearable tech has not fared so well over the last few years so we very much had that in mind when we were going for the Series A.
We wanted to learn some of the lessons, even from Jawbone. And show how we were different to other hardware startups. So very much our focus was we launched just over a year ago really to show that the unit economics work, that we could get to breakeven and a sustainable business model, because this wasone of the key concerns of investors.
Elvies tightly focused consumer product turned a profit six months after thedevicewent on sale (its currently sold in 59 countries, with 25 more to be added with the new funding). And generated $1M in revenue from direct sales during 2016 (Elvie is alsosold via third party retail channels such as John Lewis stores);the $199 price tag suggestsaround5,000 units were sold direct in the first year.
The team says the customer base is currentlygrowing by 50%, quarter on quarter. And Boler emphasizes theyve also been operating with zero budget for marketing up to now. All of which clearly helped convinceinvestors to open theircheckbooks at least those who could see beyond the noise of the wearables category.
We had some investors who asked us when we were going to start playing in the major league, and start competing with Fitbit and Jawbone and stop being so niche, says Boler. But a lot of those wearable tech companies have just been in an arms race to plough in as many sensors as possible. And users dont understand how to make sense of that data and its not relevant to them. So for us our approach is to go in, hithighly disruptive moments in a womans life, make sure were solving a real problem.
The femtech scene is beginning to show traction, she adds. In the last year theres beena lot more startups in this space. What we do we think is different, weve very much going at it around specific stages in a womans life. And supporting them during those changes because thats when theyre most likely to adopt new technology. But our ambition is to build the first ever global womens health tech brand. So we needed the extra financing to accelerate on product development and market penetration.
While it would be impossible to accuse Elvies first product of lacking a clear proposition,Boler says thespecificity has caused some investors to doubt theres anything morethan a niche market here.In a sort of damned if you do, damned if you dont twist.
I think we probably had to hit more milestones than a non-female-focused startup, she says, discussing the challenges ofraising money for a business focused on womens intimate health issues when, inexorably, themajority of VCs are men.
There were a lot of naysayers, a lot of people saying this is a niche issue.
We made sure that we went that extra mile. There were a lot of naysayers, a lot of people saying this is a niche issue You can show them the statistics and explain that 51% of the population are women and womens health are critical issues, but because these issues arent talked about the need is not so obvious.
Boler says Octopus experience building consumer brands and also launching brandsin the US wasa big pull, while female-focused firm AllBright is an obvious strategic investor, given the shared vision.
Prior to the Series A, the team raised $3M in seed funding, from investors including Google Maps founder Lars Rasmussen, iCAP founder Michael Spencer, Nicole Junkermann founder of NJF Capital, and Lulu founder Alexandra Chong, as well as taking in$1.5M via different government grants schemes using these relatively slender resources (for a hardware startup) to reboot an existing product, the kegel exerciser, by adding sensors and connectivity toenable real-time feedback and app-enabled guidance.
But tech is just the tool Elvie isusing in pursuit of itswider mission ofbuilding lifestyle products addressingwomens needs. So Boler, for example, describes the company astechnology agnostic because thepriority is addressing thetarget user, not playing in a particular technology niche.
For us its not about just the technology, we had to change the conversation because everybody talks about this issue as a yucky health issue, so there were a lot of naysayers. People said youll never get a celebrity to talk about this issue. Youre never going to get retailers to stock this in John Lewis. And we proved them all wrong.
Ultimately I think investors increasingly are seeing that the female consumer has been really overlooked, she adds.Theres now an appreciation that women appreciate and will pay for technology that will improve their lives.
Beyond questions about the size of theaddressable market for products targetingwomens personal health issues, she says some investors also worried about how to categorize the company wondering whether to file the startupunder medical devices or consumer. In fact Bolerreckons Elvie sits in between aimingto capitalize on three growth trends: female empowerment; connected devices; and a societalneed for healthcareto become more preventative to reduce costs.
When you take the women, the technology and the health, those three ingredients means that now is a very special time in history to do something big, she argues. So the opportunitys bigger than I first realized and thats why were busy building our second product, and growing the team.
Commenting on the funding in a statement, Octopus Simon King, added: Elvie is addressing an unrivalled market for womens personal health and has already established itself as the leader in this category. In particular, Octopus focuses on backing unusually talented teams and Tania and her team are exceptional. Were thrilled to accompany them in this new phase of growth, rolling out in new geographies and extending the reach of what connected hardware can do for womens personal health.
The roadmap for Elvie at this point is to have launched four devices by 2020, says Boler. And although sheisnt saying exactly whats in the works she confirms each forthcoming product that willsit under the Elvie brand will be focused ona very specific challenge that a womans facing in her life at that moment. So again, the products will be outcomes based rather thangeneral purpose gizmos withthe resulting pitch to consumers beingtheyre paying for an improvement, rather thana capability.
I think the old fault lines between medical devices and consumer products are really blurring, she adds.What we recognize as our strategic value as a company in general is were very good at taking unloved, neglected medical devices and turning them into premium lifestyle products. And the opportunity is really big across all health devices, I think, as a call out to other startups. Because medical devices, historically, have just been purely based on function and not around a user-centered design.
So our second product is going to empower women. Its an existing product category that hasnt been innovated in for a long time. And will complement nicely Elvie Well be launching it, hopefully, in January 2018.
Forthe current Elvie kegel exerciser, Boler notes thatthe workout programs in the app have also been tweakedto be more objectives-focused enabling users to, for example, target a particular health problem but also switch to more casual usage, when appropriate.
To have intelligent solutions for women you need to recognize what their objectives are and meet those, she says, adding:We keep working on the app, its an ongoing project based on feedback. The key issue is Elvie helps women be rewarded through positive behavior and exercise so we send out intelligent reminders based on when theyre more likely to use the product, we keep adding new levels, and were actually launching some games now. Its all just about making the experience more interesting for women.