Musely secures $360M from General Catalyst without giving up equity

Musely, a direct-to-consumer telemedicine platform, has secured implicit $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, helium wasn’t looking to rise capital.

That’s due to the fact that Musely, which was founded successful 2014 arsenic a wellness assemblage earlier pivoting to medicine skincare successful 2019, has been currency travel affirmative for years, helium said. Jia didn’t privation to trim his ownership successful the institution by selling disconnected a chunk of it to VCs. They often approached him astir a imaginable circular and helium consistently turned them down, helium said.

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

Although Jia was initially skeptical, helium rapidly realized CVF’s presumption 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,” helium said.

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

The backing from CVF solves this problem, providing Musely with a superior warfare thorax to enactment its lawsuit growth. The backing volition enactment sales, marketing, and different lawsuit acquisition efforts.

Musely joins a CVF portfolio that includes Grammarly, Lemonade, and Ro. The money maintains its ain chiseled constricted partners, and the 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, the institution has not raised a azygous dollar of equity superior since, according to Jia. Musely allows patients to entree medicine products done asynchronous consultations with board-certified dermatologists and OB-GYNs.