Closing the Ring: A Case Study of How We Access Deals
How reading a book led all the way to a deal with a wellness monitor helping to track COVID-19.
Oura, an Alumni Ventures Group portfolio company, is a Finland-based developer of a wellness ring and software application that tracks multiple body measurements, all designed to help the wearer get more restful sleep and perform better.
The tracked data and application allow users to better align to their natural circadian rhythm, learn their sleeping and overall wellness habits, and thereby improve overall health.
What started as a useful product to track sleep and wellness has suddenly stepped up to address even more urgent needs in the wake of COVID-19. In March, Oura launched a partnership with UC San Francisco to track the vitals of 2,000 frontline healthcare professionals wearing Oura rings, to determine if its technology can help detect early physiological signs of COVID-19. And ahead of the NBA restart in July, the league purchased 2,000 Oura rings to help identify potential COVID-19 symptoms among players, coaches, and staff.
This evolution and some of the prominent press and mentions that Oura has been receiving led Managing Partner David Shapiro of our sponsor fund, Blue Ivy Ventures (for Yale alumni and friends), to reflect on his own path into the deal. Below is David’s account:
The Road to a Deal with Oura
I was reading the book Why We Sleep, by Matthew Walker, and shared it with our CEO, Mike Collins. Mike wrote me back, simply, “You should reach out to the author. Sleep is an underinvested space.” I totally agreed, and that’s all I needed to hear.
So I set off down the path in search of sleep-related venture activity and companies. Through the Blue Ivy network, I was able to connect with the author via an Investment Committee member at Google/Verily. A few conversations with Matthew heightened my interest and focus on sleep, including wearables as well as software.
Eventually, I discovered Oura and bought a ring to try it for myself. I was extremely impressed by my experience and decided to look into Oura as a potential investment. That led me to:
- Discover their Chairman and angel investor was a Yale alum!
- Find a connection with the CEO via a former colleague of mine based in Helsinki of all places, who knew an Oura co-founder
- Ask Blue Ivy Ventures portfolio company Rhone to act as a CEO reference
- Secure a last-minute spot in the final part of their Ser B round in December, 2019
It took a full year between reading Matthew Walker’s book and getting access to Oura’s Series B round. During that time, this was probably the wildest “deal ride” I’ve led and been on. And I still check my sleep and readiness scores every morning. Which is my way of saying, “check out an Oura!”
Why We Liked the Deal with Oura
As for why David, his investment team, and Investment Committee committed to the Oura deal, here’s what we like about the deal:
- Strong organic growth year over year, with minimal marketing efforts.
- Sticky product with users, with 77% of users continuing to wear their ring after 90 days and 75% of active users checking the Oura app within the first hour of waking.
- Strong investor syndicate, with Forerunner, Gradient Ventures (Google) and Square.
- Oura is taking advantage of key market trends surrounding health and wellness, but particularly sleep, as the market is just beginning to take off.
To which we can say today, the product and market opportunity are more compelling than ever.