Venture capitalists look beyond tech to the dietary supplements market

How do you stay sharp and fit despite fatigue and age? By consuming substances extracted from blueberries, flowers and algae, say the makers of a new group of unregulated and unproven health pills.

Trusting natural chemicals to solve inevitable ailments is familiar to anyone who has visited a GNC store or contributed to the $30 billion spent annually in the U.S. on dietary supplements.

But the new supplement firms are grabbing attention because they’re founded and funded by people more at home at a Silicon Valley technology campus than a late-night infomercial.

Led by tech world veterans and funded by venture capitalists, dietary supplement start-ups such as Ritual, Elysium and Nootrobox are peddling daily multivitamins and energy-boosting gels with transparency and testing that’s turning heads in the industry. They’re taking the unusual steps of pointing to studies that justify ingredient choices and even publishing full lab test results.

“We’re not introducing a new drug or something very different,” Ritual Chief Executive Katerina Schneider said. “We’re making something a lot better. The industry needs this disruption.”

That’s plausible in an industry long associated with unreliable promises and dodgy characters. And the start-up’s deep pockets and tech pedigree may cut through skepticism and instill a sense of authenticity craved by younger customers.

But there are signs that these start-ups, like many supplement companies before them, leave out key facts and overstate health claims.

Why investors fund supplement start-ups

Supplement start-ups are gaining traction as venture capitalists spread hundreds of millions of dollars in cash to lucrative areas beyond apps and gadgets.

The investors are lending their credibility from successful bets on Snapchat, Uber and Dollar Shave Club to offbeat ideas in food and health. They’re backing products that resemble eggs and meat — hoping to produce them in more environmentally friendly ways — and start-ups seeking to turn breakfast, lunch and dinner into slurpable meal-replacing drinks.

Investors expect big paydays because of several apparent cultural shifts. People now are accustomed to paying monthly for a ration of products and services, whether it’s supplements or shows on Netflix. Having the Internet at their fingertips all day has made younger consumers more attuned to what they eat — and they prize products that are cheap, simple and affordable.

Those desires are at odds with business models of struggling retailers such as GNC, but neatly addressed by the start-ups.

The firms also aspire to be more than pill pushers. By adding services such as coaching and offering online videos on healthy living, the start-ups could be as essential to millennials as Centrum or Weight Watchers are to seniors.

About half of U.S. adults and a third of children take supplements: some by choice, some by doctors’…

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