Oura is worth $2.55billion – yes, really

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Oura is worth $2.55billion

Oura recently announced the sale of its one millionth ring.

Today Oura announced a funding round for future growth. When companies raise capital it gives an effective valuation of the company. That valuation today is $2.55bn for Oura

Thoughts

All the key wearable players could copy Oura and must all now clearly understand the opportunity. However, there are new kinds of risks and new barriers to entry including

  • Existing watch production lines will almost certainly be inappropriate to produce rings
  • Several design, finish and size combinations need to be produced and stocked
  • Creating an app as good as Oura’s is a significant undertaking
  • Component miniaturisation and hits on battery life present new challenges
  • Supply chains and channels to market would be quite different for the likes of Fitbit and Garmin.
  • Product aesthetics need to be spot-on
  • Rings with other USPs have been tried by Amazon, Motiv, Circular and others. Oura seems to have the exactly correct focus and competitors would have to compete directly with Oura – a clearly well-established player.

Just like Whoop, there is a massive profit opportunity here. I’ve been saying it for years! We’re MUCH more likely to see a company like Garmin go for Whoop’s market but much more likely to see a company like Apple go for Oura’s market. I’m less sure about Google/Fitbit and if they would pursue either of these, I suspect whichever they chose they would end up wishing they had chosen the other. I expect Garmin and Apple to make those moves at some point, with Garmin being the first mover. When? No idea.

  • Q: What is the exit strategy for Oura?
  • A: They’ve grown so big that I can’t see anyone paying the premium over $3bn that would be required to take control. They could probably list on NASDAQ but that’s not really an exit strategy for the company, just for its original owners!
  • Q: Then where would the growth come from once they are listed with cash in the bank?
  • Sure there are a lot of fingers out there for Oura to expand onto but ultimately Oura would then need to branch out to other products in vastly more competitive markets than which they currently focus on.

 

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4 thoughts on “Oura is worth $2.55billion – yes, really

  1. I think exit strategy could become a legit challenge for Oura, or more specifically their investors. As you noted, they’ve grown to a theoretical valuation that makes them all but impossible to acquire for any player except Apple. Sure, others could technically do it, but practically speaking none would spend that amount of money. And for a company like Apple (or Garmin), they could far more easily do the tech pieces for under $3B (for well under a hundred million or so likely). And since Apple would junk the software side anyway, there’s very little to gain there, nor any meaningful amount of consumers to acquire (at Apple’s scale anyway).

    I’m curious to see how this places out. Certainly this isn’t a good environment for IPO’ing a company like this. Perhaps selling to another investment group, but revenue-wise they’d take countless years to get their ROI (since again, lack of valid buyer to acquire).

  2. Apple does a lot of acquisitions but more commonly acqui-hire or acquisition of a technology capability and at a much earlier stage. The only time I can think of when they were in this ballpark is the Beats acquisition. I don’t see it happening.

    If you are going to have a passive, faceless thing that is gathering data 24×7 then Oura seems to make more sense than Whoop to me. It is relatively tiny and discrete. I mean, if you are going to wear a big wrist band, it might as well also be a watch. The problem with both of them is they don’t capture exercise very well but a sports watch or smart watch captures 24×7 data just as well.

    1. yep. oura will never capture exercise properly on the finger (neither will anyone else).
      yep. fitbit/whoop/garmin/apple use inherently inaccurate wrist-based tech.
      both do sleep well.
      square that circle/triangle!

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