The UK startup behind a connected kegel exerciser called Elvie is today announcing a $6 million Series A round led by European VC firm Octopus Ventures. Female focused VC AllBright is also joining the round, which will be used to expand sales to more markets and build out its product portfolio, with a second device planned for launch in early 2018.
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 Elvie back in November 2014 — describes its overall focus as ‘femtech’, with the push and purpose for the team being to develop smarter products that address 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 floor can have additional positives, with Elvie touting “better sex” as one of the potential lifestyle benefits, for example.
This does put the startup into something of a category of its own in the hardware startup space, where wearable-makers aren’t typically building for such a single and specific (let alone female-focused) purpose. And where addressing ‘women’s needs’ most likely means some sort of aesthetic concession — such as wearables where the tech is embedded into a piece of jewelry.
It’s also fair to say that the consumer wearables space has not had the easiest ride in recent times. Even for veterans of the category like Pebble, Fitbit and Jawbone — 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 it’s not all doom and gloom — at least not for this alternative ‘wearable’ maker (the Elvie device is worn internally during pelvic 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 around the hardware revolution and the potential of connected devices — because the success 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 was one of the key concerns of investors.”
Elvie’s tightly focused consumer product turned a profit six months after the device went on sale (it’s 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 also sold via third party retail channels such as John Lewis’ stores); the $199 price tag suggests around 5,000 units were sold direct in the first year.
The team says the customer base is currently growing by 50%, quarter on quarter. And Boler emphasizes they’ve also been operating with “zero budget” for marketing up to now. All of which clearly helped convince investors to open their checkbooks — 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 don’t understand how to make sense of that data and it’s not relevant to them. So for us our approach is to go in, hit highly disruptive moments in a woman’s life, make sure we’re solving a real problem.”
“The femtech scene is beginning to show traction,” she adds. “In the last year there’s been a lot more startups in this space. What we do we think is different, we’ve very much going at it around specific stages in a woman’s life. And supporting them during those changes — because that’s when they’re most likely to adopt new technology. But our ambition is to build the first ever global women’s health tech brand. So we needed the extra financing to accelerate on product development and market penetration.”
While it would be impossible to accuse Elvie’s first product of lacking a clear proposition, Boler says the specificity has caused some investors to doubt there’s anything more than a niche market here. In a sort of ‘damned if you do, damned if you don’t’ twist.
“I think we probably had to hit more milestones than a non-female-focused startup,” she says, discussing the challenges of raising money for a business focused on women’s intimate health issues when, inexorably, the majority 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 women’s health are critical issues, but because these issues aren’t talked about the need is not so obvious.”
Boler says Octopus’ experience building consumer brands — and also launching brands in the US — was a 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 to enable real-time feedback and app-enabled guidance.
But tech is just the tool Elvie is using in pursuit of its wider mission of building lifestyle products addressing women’s needs. So Boler, for example, describes the company as “technology agnostic” — because the priority is addressing the target user, not playing in a particular technology niche.
“For us it’s 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 you’ll never get a celebrity to talk about this issue. You’re 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. “There’s now an appreciation that women appreciate and will pay for technology that will improve their lives.”
Beyond questions about the size of the addressable market for products targeting women’s personal health issues, she says some investors also worried about how to categorize the company — wondering whether to file the startup under ‘medical devices’ or ‘consumer’. In fact Boler reckons Elvie sits in between — aiming to capitalize on three growth trends: female empowerment; connected devices; and a societal need for healthcare to 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 opportunity’s bigger than I first realized and that’s why we’re 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 women’s 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. We’re 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 women’s personal health.”
The roadmap for Elvie at this point is to have launched four devices by 2020, says Boler. And although she isn’t saying exactly what’s in the works she confirms each forthcoming product that will sit under the Elvie brand will be focused on “a very specific challenge that a woman’s facing in her life at that moment”. So again, the products will be “outcomes based” rather than general purpose gizmos — with the resulting pitch to consumers being they’re paying for an improvement, rather than a 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 we’re 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. It’s an existing product category that hasn’t been innovated in for a long time. And will complement nicely Elvie… We’ll be launching it, hopefully, in January 2018.”
For the current Elvie kegel exerciser, Boler notes that the workout programs in the app have also been tweaked to 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, it’s 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 they’re more likely to use the product, we keep adding new levels, and we’re actually launching some games now. It’s all just about making the experience more interesting for women.”