Past Issues

The business of fitness and wellness.

Direct-to-Consumer Healthcare


In less than two years, Hims—a men’s wellness and personal care company—has earned tens of millions in sales while raising $197M at a valuation north of $1B. Given its minimalist packaging and suggestive subway ads, Hims tends to get lumped in with a growing list of DTC companies aiming to become the next Warby Parker. But under the hood, there’s more happening here than meets the eye. As Hims CEO Andrew Dudum told Digiday, the company is actually building the consumer healthcare platform of the future.

"We want to be the single brand for men’s and women’s health that can consult you, so you can be proactive about healthcare… We think what we’re building is a $10-20 billion company in the next few years, not a DTC brand that gets picked up by a big CPG company. — Andrew Dudum, CEO Hims" 

The part where Hims wants to “consult you” is key to understanding how a company whose core business is selling cheap, generic versions of drugs like Rogaine and Viagra could disrupt healthcare. 

Ultimately, it comes down to telemedicine — the remote diagnosis and treatment of patients. By requiring a prescription for many of its products and routing people to a network of doctors to obtain one virtually, Hims is turning customers into patients. In doing so, their entire value proposition shifts from helping guys keep it up or keep their hair to helping them access healthcare on their own terms. 

The way Dudum sees it, if Hims is able to maintain consumer trust, they’ll be able to introduce any number of new products across health and wellness. Exhibit A? Hers, the company’s women’s wellness brand that launched in November 2018. 

Of course, Hims isn’t alone in using telemedicine and exceptional branding to target a long-stigmatized market. As the patents on drugs like Viagra have lapsed and telemedicine laws have relaxed, startups like Keeps, Roman, Lemonaid Health, Nurx, and The Pill Club have hit the scene, tackling everything from hair loss and erectile dysfunction to birth control and at-home HPV screenings. And these competitors are aligned on where the value lies. 

Saman Rahmanian, co-founder of Hims competitor Roman, sees the opportunity much the same as Dudum. “We never wanted to build an ED company or a men’s-health company,” Rahmanian told Men’s Health. “We wanted to build a health-care technology company.” 

Despite early success and a lofty vision for the future, DTC healthcare companies in the vein of Hims still have to prove they have staying power. Like Bill Evans, managing director of Rock Health warned, “These [market] dynamics are great for consumers, who have access to best-in-breed solutions when and if they want them. But consumer behavior in most digital-health categories does not support high-growth, large-scale businesses.” 

Headlines & Happenings

💎 Perception is Reality 

At first glance, the $34 average cost-per-class at many boutique fitness studios seems justified by the promise of high-end amenities and top instructors. But in reality, the cost is largely based on perception. As Josh Leve, CEO of the Association of Fitness Studios, told Refinery29:

"...knowing that what you set as your pricing also influences the consumer’s perception of the quality they will receive. If your fitness studio is focused on delivering the best possible experience for your members or clients, but you price below what others are charging to generate business, then consumers will believe that your offering is average; counter to how you have positioned your studio."

Sure, the economics of providing an elevated experience adds up. But how a brand positions itself among competitors and the broader market can dictate its success. It’s a fact that holds true beyond the fitness industry. In retail, the growth of Amazon and e-commerce, in general, has led to full-scale commodification of the industry, and brands in the middle are being strangled. At the same time, luxury players (Louis Vuitton) and budget brands (Dollar General) excel in good times and in bad.

Shifting back to the fitness industry, we could see the perception play put to the test. With signs of a looming recession reaching the highest likelihood in six years, combined with the risk of oversaturation in boutique studios and the competition from streaming and on-demand workout options, the fitness landscape is poised for a shake-up. If other industries are any indication, expect providers in the middle to feel the squeeze while luxury concepts and bargain options win out.

💊 FDA Crackdown

For years, the vitamin and supplement industry has gone largely unregulated. At the same time, numerous studies have shown that most supplements 1.) don’t provide a benefit and 2.) are potentially harmful. With the global supplement industry ballooning to a $128B business and three of every four American consumers reportedly now taking a dietary supplement regularly, the FDA has decided it’s time to take action. 

Last week, the agency went on the offensive, sending 12 warning letters and five online advisory letters to companies who are using unproven claims in the marketing of their dietary supplements. In a press release, the agency’s commissioner Dr. Scott Gottlieb went on to describe how the FDA intends to strengthen regulation of dietary supplements by modernizing reform and oversight. Supplement brands and manufacturers beware, warning shots have been fired.

💰 Money Moves

Private equity giant Blackstone is in talks with F45 to acquire a 25% stake in the fitness studio operator that would value the company at $400-450M. 

Peloton is said to be interviewing banks in preparation for an IPO in the second half of 2019. A report in the WSJ said the company is expected to seek a valuation north of $4B — the value of the company at its last round of funding. Read more >> Peloton by the numbers.

Actor Chris Hemsworth and Ward Blacket Investments—the investment arm of Hemsworth’s management company—have purchased a "meaningful" share of Fitness & Lifestyle Group, Australia's largest gym and fitness company. The deal also saw FLG create and fund Centr — a health and fitness app being fronted by Hemsworth. 

GNC announced that Harbin Pharmaceutical Group completed the final $150M installment of a previously agreed upon $300M strategic investment.

Sports watch manufacturer Garmin has acquired Tacx, makers of innovative indoor cycling trainers. Cliff Pemble, Garmin president and CEO, said the acquisition will help the company tap the “indoor and outdoor experience for cyclists all year long.”

Procter & Gamble acquired This Is L., a fast-growing feminine care brand, for an estimated $100M.

UK-based Eastnine, an audio coaching app for fitness and running, announced $2.58M in funding.

JuneShine, a hard kombucha brand, closed an undisclosed seed round of financing.

Bone broth company Kettle & Fire launched a new line of keto-friendly soups on Kickstarter, surpassing its $20,000 goal and raising more than $98,000 (at time of publishing).

Microbiome data analytics company Phylagen raised a $14M Series A round led by Peter Thiel-backed Breakout Ventures to tackle traceability and transparency in the food system.

Scented water company SZENT secured $2.2M in funding.

Skylar, a beauty brand that has developed “all-natural” perfume, raised $8M in Series A funding.

Healthline Media has acquired millennial-focused health and wellness website Greatist. Terms were not disclosed. 

Rowdy Mermaid Kombucha completed a $3.5M Series A funding round. 

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