Preventative health start-up Stride has raised £4.6m in seed funding from backers including Innovate UK and Morgan Stanley Inclusive & Sustainable Ventures. The money will fund a US launch of its Stride One membership.
Stride is the second health venture from Andrew Steele, the former Team GB 400m runner. He co-founded genetic testing business DNAfit, which was sold to Prenetics in 2018 for a reported $10m.
The new company sells a membership that combines DNA, gut and blood testing with consultations and supplements. It aims to turn biological data into coaching that ordinary consumers can act on.
The round
The £4.6m seed round includes Morgan Stanley Inclusive & Sustainable Ventures, the US bank's in-house early-stage investment programme, and grant funding from Innovate UK. Other participants were not named in the announcement.
Stride has not disclosed a lead investor, a valuation or how the round was split between equity and non-dilutive grant money. Terms were not disclosed. As a result, it is not possible to say how much of the company the founders gave up in the round.
The Innovate UK element matters to the cap table. Grant money adds to the company's cash without taking a share, so it reduces dilution for every pound raised compared with an all-equity round of the same size.
Traction
Steele says the programme has kept 85% of its customers over its first 13 months. Retention is the key number for a subscription health business, because the cost of DNA and blood testing is incurred at the start of a membership.
The company is betting that steady personalised insight will keep members subscribed for years. The returns from that bet will depend on whether early retention holds as Stride expands into a new market.
Use of funds
The capital has two main uses. First, Stride is developing a multi-source biological age test to add to its product range. Second, it will launch Stride One in the US, its first move outside the UK.
Steele, 42, argues that preventative health monitoring will follow the path of wearables, which went from a niche tool for elite athletes to a mainstream consumer product. He has said he expects the cost of managing health at scale to fall over the next five to ten years. He compares the long-term opportunity to the mass adoption of the £1,000 smartphone.
What's next
Stride has not set out a timetable for the US launch or said whether it will raise again to fund it. The launch will be the first real test of whether Stride can spend the new capital efficiently. Steele's track record with DNAfit, which ended in a trade sale, gives investors some evidence that he can take a consumer genomics business to an exit.
Original source: City AM — https://www.cityam.com/team-gb-olympic-medallist-raises-5m-to-make-health-tech-as-common-as-iphone/
