Musely Secures $360m From General Catalyst Without Giving Up Equity

Musely, a direct-to-consumer telemedicine platform, has secured complete $360 cardinal successful non-dilutive superior from General Catalyst’s Customer Value Fund (CVF).

The institution specializes successful compounded treatments for skin, hair, and menopause care. Musely co-founder and CEO, Jack Jia, told TechCrunch that erstwhile CVF investors reached retired to him past year, he wasn’t looking to raise capital.

That’s because Musely, which was founded successful 2014 arsenic a wellness organization earlier pivoting to medicine skincare successful 2019, has been rate travel affirmative for years, he said. Jia didn’t want to trim his ownership successful nan institution by trading disconnected a chunk of it to VCs. They often approached him astir a imaginable information and he consistently turned them down, he said.

But dissimilar accepted task capital, CVF wasn’t looking to return an equity stake, nor was it offering a indebtedness that would transportation liking complaint charges. Instead, CVF’s replacement financing is akin to a mini revenue-share agreement: companies pinch predictable gross streams get capital, and past repay nan costs on pinch a fixed, capped percent of gross it generates from nan usage of General Catalyst’s fund

Although Jia was initially skeptical, he quickly realized CVF’s position were much favorable than a modular slope indebtedness and acold little costly than a dilutive equity round.

“When I mathematically modeled it, I recovered this perfectly compelling,” he said.

While Musely has been increasing its gross connected mean 50% year-over-year and has served complete 1.2 cardinal patients, acquiring caller customers for DTC brands for illustration Musely tin beryllium very costly, Jia explained. “When you go a billion-dollar gross company, you request different cardinal successful bid to turn to nan adjacent billion,” he said. “That’s why astir of nan DTC companies, if you look astatine nan superior burn, it is huge.”

The backing from CVF solves this problem, providing Musely pinch a superior warfare thorax to support its customer growth. The backing will support sales, marketing, and different customer acquisition efforts.

Musely joins a CVF portfolio that includes Grammarly, Lemonade, and Ro. The money maintains its ain chopped constricted partners, and nan superior it invests was not included successful General Catalyst’s past $8 cardinal fundraise.

Unlike galore of its peers, Musely has been remarkably capital-efficient. After raising $20 cardinal from DCM and different investors successful 2014, nan institution has not raised a azygous dollar of equity superior since, according to Jia. Musely allows patients to entree medicine products done asynchronous consultations pinch board-certified dermatologists and OB-GYNs.