Oura, the creator of a smart ring to track health markers, hit a $5 billion valuation in its latest round, a more than 100% jump from its Series C in 2022 and a reflection of fast growth by the Apple Watch competitor.
The Finnish company announced a strategic partnership with bio-sensing company Dexcom, which is investing $75 million and will bring glucose monitoring to Oura’s wearable devices. Its flagship product, the Oura ring, monitors the wearer’s sleep, heart rate, stress levels and other biometrics.
Despite stiff competition from Apple Watch, the company is profitable and expects its revenues to double to $500 million this year. Last month, it signed a $96 million contract with the US Department of Defense to equip the Pentagon’s Defense Health Agency workforce with fixed-price rings and data analytics services to decode biometric information.
Oura’s latest strategic partnership with Dexcom makes it the most highly-valued VC-backed digital health company targeting sports and wellness, according to PitchBook data.
Oura’s growth is remarkable given a wider valuation reset within digital health.
VC investment in digital health has stagnated over the last two years, averaging around $1.5 billion each quarter. That figure is significantly off the vertical’s peak in the first half of 2021, when startups collected an average of $5.8 billion per quarter, according to PitchBook’s Q2 2024 Digital Health Report.
Oura Health’s earliest investors include Finland-based Lifeline Ventures, UK-based Proxy Ventures and Google’s Gradient Ventures.
The elephant in the room
Over the last couple of years, much of the addressable market for wearable devices that track and harness biometrics data has been dominated by a single product: the Apple Watch.
Apple Watch’s annual revenues eclipse Oura’s many times over. Apple’s “wearables, home and accessories” category—spanning its Apple Watch, AirPods, Beats and Vision Pro products—brought in $37 billion in revenue in fiscal year 2024, a nearly $3 billion dip from the previous year.
But adoption of wearable devices that track biometrics has continued, if Apple Watch and Oura are anything to go by. Over 50% of customers who bought an Apple Watch in Q3 were first-time buyers, the company said in its latest earnings report.
Oura’s 10x revenue-to-valuation multiple is “on the frothier side” for digital health, but not extreme given its current sales trajectory, according to PitchBook digital health analyst Aaron DeGagne.
Correction: Oura’s valuation jumped over 100% from its last round, not 50% (Nov. 21, 2024)
Featured image courtesy of Oura
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