Issue No. 83: The Next Wave of Men’s Wellness

Breakthrough Brands

With an emphasis on treating erectile dysfunction and baldness, startups like hims and Roman set the stage for this new era of men’s health. As pharmaceutical patents expired and telemedicine caught on, guys were able to get treatment for embarrassing ailments online. For the first time, the process was affordable, convenient, and discreet.

• The global market for ED drugs will exceed $5B in 2025.
• One in four men experience ED, but less than 15% get treatment.
• One in two men suffer from hair loss, but only 7% receive treatment.

Since 2017, Roman’s parent company Ro raised $200M to target men’s health issues among other verticals. Over the same period, hims & hers earned a $1B+ valuation for its telehealth platform. Speaking to Joe Vennare on the Fitt Insider podcast, hims & hers CEO Andrew Dudum said he believes the company could someday be worth as much $20B.

Building on the success of these breakthrough brands, countless others have taken aim at the category. While Keeps and Nutrafol focus exclusively on hair loss, Manual offers a variety of products for men across ED, hair loss, skincare, and supplements. Of note, Goop investor Felix Capital also backed Manual, hoping it follows a similar path.

Next up. Earlier this year, we said direct-to-consumer testosterone replacement therapy could be a billion-dollar business. From the look of things, Vault Health might prove us right. In March, the company raised $30M for its telemedicine service offering testosterone-focused treatments for men’s well-being.

It’s Personal

From razor blades to moisturizer and even face masks, made-for-men personal care is booming.

• 60% of men participate in self-care, according to a Miraval Group survey.
• The men’s personal care market is expected to reach $166B in 2022.
• US men spent nearly $6.8B on skincare products in 2018, reports Euromonitor.

Once, men’s grooming started and ended with shaving. Then came body spray, 3-in-1 shower gel, and “manscaping”. Now, the convergence of wellness with high-performance beauty has given rise to a host of new brands.

In 2018, ASYSTEM launched with $4M in funding for its skincare and vitamin lines. Referring to itself as a performance wellness company, BRAVO SIERRA has raised $18M for military-approved personal care products.

And the list goes on. While upstarts like Huron and Disco use clean ingredients and simple branding to deliver everyday skincare, Caldera + Lab and Maapilim are eyeing a premium market. Going a step further, Hawthorne raised $10M to develop personalized products using data-driven algorithms.

“There is significant opportunity in the men’s personal care category as men are increasingly taking more ownership of their shopping habits as well as their own personal routines.”  – Kirsten Green, Forerunner Ventures

Surveying the landscape, the future of men’s personal care is still undefined. Looking ahead, men’s makeup and non-binary beauty are gaining steam.

According to a Morning Consult survey, 30% of Gen Z men were interested in or would consider using cosmetics. Similarly, in a Euromonitor survey, 56% of US male respondents used a facial cosmetic like foundation, concealer, or BB cream at least once in 2018.

Cashing in. Early-stage companies like War Paint and Shakeup Cosmetics have raised funding for their men’s makeup lines, as established brands like Fenty and Coty push further into the category.

Fertile Ground

In an article entitled The Women’s Health Revolution, we detailed the rise of female fertility startups. Increasingly, companies focused on men’s fertility are attracting attention and investment dollars.

• Globally, the male infertility market is expected to reach $5B by 2027.
• The global sperm bank market is set to exceed $5.4B by 2025.
• Sperm count of men in Western countries has dropped 50% since 1973.

A pair of companies launched around the same time are taking a similar approach to solve this issue. Founded in 2018, Legacy raised a $1.5M round for its sperm testing and freezing service. Then, in 2019, Dadi launched a mail-order fertility test and sperm storage service.

A word of caution: Citing price and convenience, both companies hope to disrupt traditional treatment options. But experts say mail-in kits cannot replace in-office visits. More telling, neither Dadi nor Legacy are able to provide what would be legally considered medical advice.

Looking ahead: Following the lead of primary care clinics like Parsley Health and Forward, as well as women’s health clinics like Tia, there’s an opening for men’s health clinics specializing in sperm testing, hormone treatments, prostate cancer, and more.

Of note, 40% of men wait until a symptom becomes unbearable before seeing a physician. In response, expect to see more startups combine telemedicine with in-person care to target men who avoid regular check-ups.

Takeaway

From looking, feeling, and performing better to actually preventing or treating illness, men’s health is taking on a whole new meaning. Learning from the leading companies in this space, redefining masculinity, eliminating stigma, and increasing access to care is key to seizing on this multi-billion dollar market. ■

💵 A Sign of the Times

Reeling from COVID-induced shutdowns, 24 Hour Fitness has filed for bankruptcy.

• The company owes creditors $1.4B, plus lease obligations.
• 130+ of the company’s 445 gyms will be permanently closed.
• 24 Hour secured $250M “debtor-in-possession” financing to begin re-opening gyms.

In a press release, 24 Hour Fitness CEO Tony Ueber said: “If it were not for COVID-19 and its devastating effects, we would not be filing for Chapter 11.”

But… it’s not as if 24 Hour was flying high pre-COVID. Like other middle-tier operators, the company saw revenue and memberships decline prior to the pandemic.

Similarly on less-than-stellar footing pre-lockdown, Gold’s Gym also filed for bankruptcy while shuttering 30 locations. After terminating an agreement to purchase Flywheel Sports, Town Sports International is seeking $80M to fund a potential bankruptcy filing as well.

Now, in addition to contending with budget chains, high-end clubs, and boutique studios, middle-tier chains will face added competition from on-demand and at-home options. At a time when the brick-and-mortar fitness industry could see more than $10B of revenue wiped out as clients ditch memberships, the middle tier may struggle to regain their footing.

Zooming out: As we detailed in The Shifting Fitness Landscape, change was afoot long before COVID-19: “Like brick-and-mortar retailers in the age of Amazon, fitness providers will be forced to innovate on their offerings, experience, and value proposition.” Revisit the full report here.

🔁 Circling Back

Last week, we covered the controversy at CrossFit HQ. Since then, it has only gotten worse.

ICYMI: The fitness brand came under fire following a controversial tweet from company founder and CEO Greg Glassman about the death of George Floyd. In the days following Glassman’s tweet, sponsors, brands, and athletes disassociated from CrossFit, sending shockwaves through the tight-knit community.

The update. After initially apologizing for his remarks, an audio recording of Glassman sharing wild conspiracy theories about Floyd and the coronavirus surfaced, including:

“We’re not mourning for George Floyd — I don’t think me or any of my staff are.”

Shortly thereafter, Glassman announced his “retirement”, relinquishing the chief executive role. Dave Castro, a longtime CrossFit staffer and former co-director of training, will replace Glassman as CEO.

Ongoing fallout. Castro has been called Glassman’s right-hand man, leading some to question the move.

• This 2019 video shows Castro at a CrossFit presser ignoring a question about diversity.
• Former CrossFit Games champ Katrín Davíðsdóttir criticized the move on Instagram, writing: “I am disappointed, to say the least, with the solution that was provided and I do not see change. … Doesn’t Greg Glassman still own 100% of CrossFit?”

TBD. For now, we have to wait and see if Castro is able to right the ship, bringing meaningful change to CrossFit, mending the community, and salvaging the business in the process.

📰 News & Notes

• Meet the latest Mirror look-a-like.
• Is a gym that pays you a $100M idea? Probably not.
• Under Armour and Reebok experiment with fitness masks.
• Apple is building an operating system for health. [Reread: Apple Fit]
• Peloton employees “begged” not to do deliveries during the pandemic.
• Future wades into corporate wellness. [Revisit: Future CEO Rishi Mandalon the Fitt Insider podcast]

💰 Money Moves

• Headspace added $47.7M in funding, extending the $53M Series C round it raised in February.  More from Fitt Insider: What’s Next in Mindfulness?
• Hydrow secured $25M in new funding for its connected rower. Listen in: Hydrow CEO Bruce Smith on the Fitt Insider podcast.
• Nestlé Health Science acquired a majority stake in collagen protein maker Vital Proteins. More from Fitt Insider: America’s Obsession with Protein Powder 
• CareAcademy, an online training program for senior care professionals, closed a $9.5M investment. More from Fitt Insider: The Senior Care Crisis
• Therapist matchmaking platform Advekit secured $2.6M in funding for its mental health platform. Related: Two Chairs CEO Alex Katz on the Fitt Insider podcast.
• Conversa Health landed $12M in funding for its virtual healthcare platform. Related: hims & hers CEO Andrew Dudum on the Fitt Insider podcast.
• WIT Fitness, an ecommerce platform and gym operator, secured GBP£1.5M ($1.89M) in follow-on funding from growth capital investor VGC Partners.
• Cake, a “wellness brand for the bedroom”, landed $1.43M in seed funding. More on Fitt Insider: Destigmatizing Sexual Wellness
• Tomorrow Health, a startup reimagining at-home healthcare, launched with $7.5M in seed funding led by Andreessen Horowitz.
• TREO birch water closed a $5M investment.
• Béla, a wellness beverage brand, raised $515K in seed funding.
• BIOMILQ raises $3.5M for its cultured human breastmilk.