The $3.6 Billion Human Performance Company

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Hey Friends,

As technology has become deeply ingrained in our daily lives, professional athletes, weekend warriors, and casual consumers alike have all demanded a deeper understanding of their bodies through analytics.

WHOOP, the human performance company that collects and provides physiological data 24/7 to optimize how you train, recover, and sleep, is capitalizing on that trend better than anyone.

The fitness tracker worn by hundreds of professional athletes announced a $200 million Series F investment yesterday led by Japan’s investment giant SoftBank. The new funding round values the tech startup at $3.6 billion, tripling its valuation from October's previous $100 million financing round.

WHOOP Valuation History

  • October 2020: $1.2 billion

  • August 2021: $3.6 billion

WHOOP Fundraising History

  • January 2013: $751,000 convertible note

  • July 2013: $3 million seed round

  • June 2014: $6 million Series A

  • September 2015: $15 million Series B

  • March 2018: $25 million Series C

  • November 2019: $55 million Series D

  • October 2020: $100 million Series E

  • August 2021: $200 million Series F

WHOOP plans to use the money to enhance membership experience, develop new technology and features, hire great talent, grow internationally, and expand its deployment of athlete-specific data within live sports.

As trillion-dollar companies like Amazon, Apple, and Google look to join the fitness wearable party, Ahmed says that “being well-capitalized as a start-up when you take on the biggest companies in the world tends to be a good strategy.”

So, I know what you’re thinking. SoftBank has had a few misses lately, and some people believe WHOOP is just another Fitbit, a company that Google acquired for $2.1 billion after its market cap dropped 80% from $10 billion to $2 billion.

But I really do think WHOOP is different. Will Ahmed founded the business at Harvard after realizing the impact of physiological data on rest, recovery, and sleep for amateur and professional athletes.

Ahmed and his cofounders John Capodilupo (CTO) & Aurelian Nicolae (Chief Engineer) developed their prototype in 2012 at Harvard’s innovation lab — the company was called Bobo Analytics back then — and the business has evolved since.

In simple terms, WHOOP makes wearable technology, like their popular five sensor-equipped bands, which collects data 100 times per second to provide a 24/7 comprehensive picture of personalized human performance.

The difference between WHOOP and a traditional heart rate monitor is the data.

With a screen-free interface and no additional gimmicks, the WHOOP band is only worried about one thing — collecting and analyzing health-related metrics. In return, the WHOOP band is able to capture thousands of additional data points per minute compared to a traditional heart rate monitor.

These data points include both performance-related metrics like average heart rate, resting heart rate, and heart rate variability, but also sleep & recovery-related metrics like sleep stage recognition, latency, and efficiency.

As data is continuously being collected throughout the day, WHOOP analyzes the metrics in real-time through personalized, proprietary formulas and displays the results in a simple and easy-to-understand dashboard.

The user can then review the results to educate themselves on how much strain a workout is causing, how long their body will need to recover, the recommended amount of sleep, and whether your training might result in injury or fatigue.

But, in my opinion, the secret to WHOOP’s success has been their meticulous top-down approach to product innovation and an investment strategy fixated on quality distribution.

WHOOP started as a premium product — the company charged an annual fee between $500 to $5,000 per person — and they worked with world-class athletes like LeBron James and Michael Phelps to cater to their specific health profiles.

The thought process was simple: If the product were good enough for the best athletes in the world, it would be good enough for the average athlete also.

They eventually flipped to a $30 per month subscription plan, which multiplied the total addressable market by a considerable amount, and opened the door for large institutional investors to invest heavily into the space.

WHOOP has since raised more than $400 million from giants like SoftBank and IVP, but more importantly, they have secured investments & endorsements from the same world-class athletes they set out to impress.

More than a dozen professional athletes now own equity in WHOOP, including Kevin Durant, Patrick Mahomes, Michael Phelps, Larry Fitzgerald, Eli Manning, Russell Okung, Rory McIlroy, and Justin Thomas.

Interesting Note: Most of these athletes invested in the $100 million Series E round in October, meaning their investment has already been marked up 3x in less than a year.

Former late NBA Commissioner David Stern also held equity in the company, along with Twitter & Square CEO Jack Dorsey and Netflix co-founder Marc Randolph.

Now, don’t get me wrong, the $6 trillion market cap lineup of Amazon, Apple, and Google is still coming for WHOOP.

Amazon recently released a fitness subscription app named Halo, while Tim Cook has repeatedly said he wants Apple’s legacy to be within health & wellness, and Google completed its $2.1 billion acquisition of Fitbit in January.

But with $200 million in fresh capital, a star-studded lineup of institutional & athlete investors, and a strong first-mover advantage, don’t be surprised to see WHOOP win out in the end.

Have a great day, and I’ll talk to everyone tomorrow.

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