Whoop, which makes a fitness tracker that is popular with professional athletes, reached a $3.6bn valuation following an investment from Japan’s SoftBank, signalling a willingness from investors to challenge tech giants in the health monitoring business.
SoftBank’s second Vision Fund led a $200m investment in Whoop, making it the most valuable standalone fitness monitoring start-up, the company said. The new funding increased Whoop’s valuation three-fold from a previous financing in October.
Whoop chief executive Will Ahmed said the new capital would help the company compete with Amazon, Apple and Google, which each sell wearable health tracking devices.
“We’re competing with trillion-dollar companies,” Ahmed said. “Being well capitalised as a start-up when you take on the biggest companies in the world tends to be a good strategy.”
Whoop’s fundraising is the newest sign that investors are warming to wearable technologies despite a string of recent high-profile failures, as SoftBank and other deep-pocketed backers flood tech start-ups with record amounts of capital.
Oura, which makes a ring that measures a user’s quality of sleep, raised $100m in May from investors including Singapore’s Temasek, valuing the company at $800m. The second Vision Fund also led a $100m investment round last year in Biofourmis, a health company that uses a wrist sensor to monitor physiological data and predict medical problems.
The tech giants have pushed deeper into digital health in recent years. Apple chief executive Tim Cook has said he wants the company’s greatest legacy to be in the areas of health and wellness, through products like the Apple Watch.
In January, Google completed a $2.1bn deal to purchase the fitness-tracking company Fitbit, following extended regulatory reviews during which rivals raised concerns about competition and the handling of health data. Ahmed said Whoop does not sell customer data to third parties.
Whoop sells a subscription health coaching app that uses data from a wrist strap to recommend changes to a user’s sleep and exercise habits.
Ahmed said Whoop had developed “proprietary algorithms” to measure strain and recovery, metrics that take into account data like heart rate variability.
Amazon has recently moved into Whoop’s territory, selling a screenless fitness tracker called Halo with a subscription app.
Ahmed said Whoop has retained a rising percentage of users over time since switching to a subscription-based business model in 2018. He declined to comment on the size of the company’s customer base.
“Sometimes, when you go to a wider audience you can experience more churn,” Ahmed said. “For Whoop, it’s actually been the opposite.”
Ahmed, a former captain of the Harvard University squash team, founded Whoop in 2012 with two fellow students after growing frustrated at his lack of visibility into his own fitness.
The basketball player LeBron James and swimmer Michael Phelps became two early users of the product. Whoop has also signed deals to provide wristbands to the professional golfing and American football leagues, and its list of investors includes the golfer Rory McIlroy and the basketball player Kevin Durant’s Thirty Five Ventures.
Ahmed said Whoop had not yet spent most of the $100m in capital it raised in its last financing led by Institutional Venture Partners, which also invested in the latest round of funding.
Earlier attempts at wearables had been, “to put it politely, underwhelming”, he said. “I think people are underestimating the power of this technology.”