In the midst of a pandemic, Oura saw sales of its health-tracking smart ring skyrocket.
Accelerating into 2021, we’d be surprised if the company didn’t announce a new funding round in the first part of the year.
Is Oura the next billion-dollar wearable? Let’s take a look.
Zero to One
In 2013, the Oulu, Finland-based trio of Petteri Lahtela, Markku Koskela, and Kari Kivelä set out to build a better wearable.
- The finger, not wrist, is better for collecting physiological data.
- To encourage wearability, style and comfort are essential.
- Sleep and recovery, not steps taken, would be the focal points.
A sleek, sensor-packed ring checked all the boxes. Easier said than done, it took years to engineer and validate its first device.
In 2015, the startup launched its “revolutionary ring-sized wellness computer” on Kickstarter, raising $650K in 37 days. That same year, Oura closed $2.3M in seed funding.
But the original device was clunky, and additional capital was hard to come by. It wasn’t until 2018, when the second-generation ring debuted, that Oura started to catch on.
Soon, tech executives like Twitter and Square CEO Jack Dorsey were tweeting the company’s praises. And Oura added new funding from the likes of Michael Dell and Dave Morin, as well as athlete-investors Lance Armstrong and Shaquille O’Neal.
Sleep > Steps
From the onset, Oura prioritized sleep tracking ahead of step counting or activity metrics alone. It’s clear to see why:
- More than 70M Americans suffer from a sleep disorder.
- The global sleep aids market could reach $101B by 2023.
- The biometric and wearable device market is expected to reach $71B by 2024.
Essential to good health, sleep has been something of a sacrificial lamb willfully discarded at the altar of hustle. But more recently, a restful night’s sleep has become a pillar of high-performance — a growing segment where Oura is well-positioned to capitalize on the burgeoning sleep economy.
Focusing on the tech, the ring houses LED sensors, a gyroscope, and an accelerometer to track data about your body, activity, and sleep. Unique to most wearables, Oura also tracks body temperature, heart rate variability, and respiratory rate.
“Readiness is an overall measure of your recovery that signals your capacity to perform at your mental, emotional, and physical best.” – Oura’s website
Relaying this information to an app, metrics for step count, calorie burn, sleep quality, and respiratory rate are displayed. Using this data, Oura’s algorithms deliver scores for Sleep, Activity, and Readiness, where the latter encompasses recovery and preparedness for the day ahead.
A Turning Point
In March of last year, Oura closed $28M in Series B funding. At the time of that announcement, a few key figures stood out:
- 150K rings sold to date
- 100 employed globally
- 77% of users continuing to wear their ring after 90 days
- 75% of active users checking the Oura app within the first hour of waking
Of note, financial services company Square participated in Oura’s Series B — the result of Square CEO Jack Dorsey reaching out to Oura CEO Harpreet Singh Rai on Twitter. More interesting, Square’s Hardware Lead, Jesse Dorogusker, joined Oura’s board.
But most interesting of all, a mere eight months later, Oura had doubled sales to 300K rings sold, while also doubling the number of employees to 200.
Early in the pandemic, Oura learned of a user who, after receiving a low “Readiness” score, sought medical attention for a possible COVID infection. As it turned out, Petri Hollmén did, in fact, have coronavirus (he’s since recovered).
In the months that followed, as similar stories surfaced, wearable tech companies like Oura emerged as a kind of early warning system. Leaning into this sentiment, and putting its technology to the test, Oura inked a number of high-profile partnerships with the NBA, WNBA, UFC, and NASCAR, among others.
Early studies indicate that the Oura ring could help detect coronavirus infections before symptoms occur. More specifically, temperature monitoring, heart rate variability, and respiratory rate have proven to be key metrics in predicting a possible illness.
As Harpreet Rai sees it, the ring’s ability to catch COVID symptoms early could help stop the spread. But, experts are less convinced.
Dr. David Hirschwerk, an infectious disease specialist at North Shore University Hospital, stresses that “[the ring] does not replace diagnostic testing.” Adding: “It may play some very minor role, but I can’t see at this moment that it has significant value in identifying COVID-19 specifically.”
From step counting to sleep tracking and, now, health monitoring, wearables like Oura hope to become an indispensable and ubiquitous aspect of our existence. In pursuit of this goal, a number of questions remain unanswered.
“We’re a hardware company. We’re a data company. And we’re a consumer company.” – Oura CEO Harpreet Singh Rai
At the most basic level, accuracy and credibility are paramount. To that end, peer-reviewed research and FDA approval could help Oura break into healthcare. Expected to reach $1.3T by 2025, the enterprise health and wellness sector is fertile ground for expansion.
Of course, doing so will require fending off competitors big and small — from incumbents like Apple, Garmin, and Fitbit to Amazon’s new Halo health tracker and upstarts like WHOOP (whose latest funding round valued the company at $1.2B).
Worth mentioning, smart ring maker Motiv was acquired by Proxy, a company working on digital identities, in an effort to alter the way we interface with the physical world. In that context, Square’s investment in Oura represents a host of possibilities that are almost impossible to predict but compelling nonetheless.
Oura’s business model also poses a hurdle. As it stands, the company’s standard ring costs $299. A one-time purchase, the hardware maker has yet to introduce a subscription (like WHOOP) that would lock in customers and establish a recurring revenue stream.
Finally, privacy concerns could prove to be a limiting factor, giving consumers pause and forcing the industry to create new legislation defining data usage.
Punchline: Riding a wave of momentum, Oura is poised to continue its rise into 2021 and beyond.
🎙 On the Podcast
Today, on the Fitt Insider podcast, we’re excited to bring you another edition of Startup Spotlight — a recurring series where we speak with early-stage founders working on fitness and wellness startups.
This week, we’re joined by Emily Hochman, the founder and CEO of Wellory.
In this episode, we discuss:
- Building the anti-diet app
- Raising $4.2M in funding
- Personalizing nutrition coaching
- Creating a high-touch experience for health seekers
Listen to the full episode here.
☝️ Going Solo
While the debate over whether or not members will return to gyms continues, a key factor is being overlooked. Mainly, will fitness professionals be there upon reopening?
A point we’ve explored in Arming the Rebels and The Future of Personal Training, when gyms closed, fitness professionals were forced to fend for themselves. Almost a year later, some trainers have found new, more lucrative opportunities in going solo.
A recent NYT article highlights this development. In one example, Jill Anzalone, a former Orangetheory Fitness instructor, explained how she transitioned into teaching virtual classes and the benefit of doing so:
“Ms. Anzalone is also keeping a larger share of what her clients pay. Now teaching six virtual classes a week with eight students in each, she earns what she did with the same number of classes with 39 students in a crowded studio.”
Similarly, other trainers interviewed for the piece have seen increased demand in clients willing to pay for virtual or at-home training, charging upwards of $300/hour, $1,000/day, or an annual retainer of $100,000 for coaching, custom workouts, and meal planning.
TBD. If omnichannel exercise is the future of fitness, what does the hybrid model look like for fitness professionals? Up for grabs, there’s a billion-dollar business to be built in service of solo fitness creators.
🛌 Selling Sleep
As our deep dive into Oura makes clear, selling sleep is a big business. But wearables and sensors aren’t the only solution.
Key to its success, Calm’s Sleep Stories helped the meditation app earn a $2B valuation. Beyond content, sleep coaching is catching on. And upstarts like Bioloop, Rise, and Wave are springing up.
- Bioloop. Currently in closed beta, Bioloop offers one-on-one sleep coaching leveraging data from your sleep-tracking devices.
- Rise. By analyzing your sleep data from a smartphone or wearable, Rise makes personalized recommendations that promote a healthy sleep practice.
- Wave. Originally a meditation app, Wave recently relaunched with a focus on live guided sleep sessions.
📰 News & Notes
- The Rock launches an energy drink.
- High-protein, plant-based ramen has arrived.
- WHOOP becomes the PGA’s official wearable.
- Samsung’s new TV tracks workout reps and form.
- The Delta is a new maternal health and wellness community.
- Can Tracksmith stay true? [Listen in: Our interview with Tracksmith CEO Matt Taylor]
💰 Money Moves
- Keep, China’s most popular fitness app, raised $360M in funding at a $2B valuation led by SoftBank’s Vision Fund.
- Vegan food brand Oatly is eyeing an initial public offering that could raise $1B.
More from Fitt Insider: The Quest for Cow-free Milk
- Hinge Health, a digital physical therapy platform, raised $300M at a $3B valuation. Coatue Management and Tiger Global Management led the round.
- Monument, an online alcohol treatment and recovery platform, raised $10.3M in Series A funding led by VMG Catalyst.
More from Fitt Insider: Sober is the New Cool
- Dublin, Ireland-based Frankie Health raised $1.5M in seed funding for its personalized mental health platform.
- BoxUnion, a California-based fitness boxing brand, acquired TITLE Boxing Club, a fitness franchise with 166 clubs worldwide. Terms were not disclosed.
More from Fitt Insider: Consolidation Comes to Fitness
- Revelstoke Capital Partners acquired a majority interest in Empire Portfolio Group Holdings, a leading franchisee of Orangetheory Fitness.
- New Wave Foods, makers of plant-based seafood, raised $18M in Series A funding co-led by New Enterprise Associates and Evolution VC Partners.
More from Fitt Insider: Plant-based Everything
- Thistle, a plant-based meal delivery company, secured $10.3M in Series B funding led by PowerPlant Ventures.
More from Fitt Insider: Our conversation with Dan Gluck of PowerPlant Ventures.
- Keto bread maker Uprising landed $1.25M in funding.
More from Fitt Insider: The Keto Gold Rush
- Air Protein, a startup using fermentation to make meat alternatives, closed a $32M funding round led by ADM Ventures, Barclays, and GV (formerly Google Ventures).
- Partake Foods, an allergy-friendly food brand, closed $4.8M in Series A funding.
- Outstanding Foods, a better-for-you snack brand, raised $10M in new funding.
- Procter & Gamble terminated its agreement to buy Billie, a women’s razors and body care brand, following an FTC antitrust lawsuit.