Archive for April, 2019


Investors Bet on Wellness Tech: Startups Funded $2 Billion

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Investors are betting that humans turn to tech startups for wellness solutions.

Wellness is not just a buzzword, it’s a $4.2 Trillion market and growing. It’s a movement and it’s happening now. Our society has taken a turn and people are more focused on their physical, mental and spiritual health than ever before. Being happy and healthy has evolved into a top priority.

In walks technology…Apps and startups have enabled this movement by creating technology to address our mind, fitness, sleep, diet, reproductive health, environment and beyond. WellTech has been surging with innumerable apps and companies over the last decade. Investment activity has followed in suit with over $2.2B in investment in the 97 modern wellness startups we’ve identified as of March 2019.

Why WellTech?
Rising healthcare costs have created a growing need for alternate options to address our wellness – physical, mental and spiritual. With increased healthcare costs, increased stress and ailments, and a growing trend toward happiness and health, the market is primed for wellness apps and technology. These technologies give users assistance in achieving overall wellness and help them take proactive measures for a healthy lifestyle. Modern wellness startups have stepped up to fill the gap. People are turning to consumer technology from Apple, Google, Amazon and others to solve these needs –they have less barriers to entry, despite some initial costs for hardware.

Startups Come in Four Flavors
We have classified these wellness startups into four categories: Mind, Body, Community and Space (check out our detailed infographic on this space here). Mind includes startups addressing emotion recognition, intelligent assistance therapy, mental health, mindfulness, mood shaping and stress. Body includes connected apparel, fitness, health, nutrition, sexual wellness and sleep. Community includes the busy market of on-demand fitness and wellness, cryptofitness and on-demand elder care. Lastly, Space involves air, light, scent, sleep, sound, touch and manipulation of whole space.

Funding:

  • Community 37%, $811M.
  • Body has 29%, $647M.
  • Mind has 18%, $403M.
  • Space has 15%, $333M.

There are some outliers, like the newly-crowned $1B+ valued unicorn, Calm, a startup that helps users relax, sleep, or focus. Calm recently raised $88M to total their funding to $116M, a leader in the Mindfulness subcategory of the Mind category.

Community’s large amount of funding is lead by ClassPass, a subscription-based fitness app, at $239M and Practo, a medical advice and booking app, with $234M. These are both large startups that have matured and have accrued funding over the years.

Future Changes in WellTech
The Community category, which incorporates the on-demand fitness and wellness providers, is pretty saturated with lots of emerging startups and investments in the last couple of years. We expect this to flatten out.

Mindfulness has been heating up, expect more here, especially with Headspace, a meditation and mindfulness app that will match funding and valuation to rival Calm. Also, be on the lookout for funding in the Intelligent Assistance Therapy sector, with startups like talkspace, an online therapy app.

Sleep startups don’t currently have the funding that other subcategories have, but we expect that to change soon. Between wearables and environment management, this is a wildly growing sector. Apple recently acquired Beddit, showing market value/

In the Body category, we’ll see growth in Nutrition startups like uBiome which provides microbiome testing, and habit that offers personalized nutrition, like highly-anticipated Lumen.

Growth Categories:
We’re often asked about the underfunded categories, as these have the most potential to grow. We see three regions that may quickly grow if new innovations are brought forth to market:

  1. New sensors and software. That can measure brain wave activity, galvanic skin response, facial recognition or accurately measure breathing are underfunded categories that may blossom into new business models
  2. Corporate Wellness Technology (CWT) Platforms. Employee wellness solutions that combine multiple features into one suite. Corporations are adopting these technologies for employee wellness, yet they are loosely strung together and lack a cohesive experience.
  3. Data and analytics that measure actual human improvements. There’s a need for analytics that combine biometrics to actually gauge if wellness practices are making a long-lasting effect beyond just simple usage this is for consumer level, crowd aggregation, and at societal level.

We’ll also see acquisitions that create super apps that offer comprehensive wellness platforms that address mind, body, community and space. Google and Apple are likely contenders in this arena, but there’s certainly room for an independent startup to take this on. Large sports brands like Nike, Under Armour and Reebok have an opportunity to step forward to lead on this, as well.

We have a spreadsheet tracking these top 100 startups and will report on a periodic basis how this market is shaping up.

Research assistance by Julie George

2019, Red Hot IPO Year for Silicon Valley

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There are nearly a dozen tech Initial Public Offerings (IPOs) planned for 2019, the tech companies are scurrying to generate immense wealth before the expected 2020 recession. While many industries are seeing financial problems. pre-IPO tech companies are being heavily valued by Wall Street traders and financial analysts. Most of these companies are Collaborative Economy companies, an industry I covered with great detail over the last half decade. These online marketplaces enable the buying and selling of assets (they don’t own) between individuals. Since they don’t own most of the assets, they have great upside –and little downside. These tech companies are the darlings in business, as they prepare for a massive set of IPOs that could result in over $250 Billion in material wealth as their shares are released to the open market. Here’s a quick breakdown of their anticipated valuation of this year’s launches: 


Silicon Valley Tech Companies 2019 Expected IPOs

Company Industry Expected IPO Valuation (Billions $)
Lyft (March IPO) Collaborative Economy 21
Uber Collaborative Economy 120
Airbnb Collaborative Economy 31
Palantir Data Analytics/AI 41
Pinterest Social 12.3
Slack Enterprise Collaboration 10
Postmates Collaborative Economy 1.2
PoshMark Collaborative Economy 1
Robinhood Financial Services 5.6
Zoom Communications 1
PagerDuty Cloud Computing 1.7
Rent the Runway Collaborative Economy 1
SUM $246.8 Billion 

 

What it means: 

  • In 2019 expect to see these 6,000+ newly minted millionaires, most from Silicon Valley & San Francisco.
  • In about two years, 2021-2023, many of these employees will cut ways with their employer, ready to start new companies, or angel invest in the local startup community.
  • Despite the other industries to be in an expected recession, tech startups may still be seeing funding.
  • Who wins: Entrepreneurs, tech workers, VCs, LPs, Silicon Valley real estate owners, and developers.
  • Who loses: Renters seeking to buy a home, non-tech workers, Silicon Valley traffic.
  • More innovation will come out of Silicon Valley, as additional funds are injected into the ecosystem.

Hat tip Joely Urton for market knowledge. Photos used via Pexels