Generally speaking, if you’re wearing a technology on your body, you have to really love it or find it deeply useful or even essential.
That’s a high bar, which helps explain why wearables have long been a fairly niche area for startup investment. Per Crunchbase data, the category reliably attracts less than 1% of all venture funding in a given year.
This year, however, the space is looking comparatively perky. Largely that’s due to a single company: Oura, maker of a smart ring that collects data on dozens of personal health and wellness metrics.
Earlier this month, the 12-year-old Finnish company announced that it closed on more than $900 million in a Fidelity-led financing at an impressive $11 billion valuation. The raise comes in the wake of sharp growth, with Oura expecting to reach $1 billion in sales this year.
Beyond Oura
But Oura isn’t the only wearables-related company pulling in significant venture investment recently. Using Crunchbase data, we put together a sample list of 18 companies funded in roughly the past year innovating in this area.
Funded startups have a broad array of chosen use cases as well. While medical and health monitoring remains the most prevalent application, we’re also seeing the AI boom trickling into more consumer-focused offerings outside the health care realm.
Smart lenses, glasses and cow collars
In this arena, one of the largest and most recent rounds went to Xpanceo, a startup developing smart contact lenses that incorporate a microdisplay and external sensors to provide wearers with useful information based on their focus. The 4-year-old, Dubai-based company raised $250 million this summer at a $1.35 billion valuation.
Nothing, a maker of Android smartphones, earbuds and watches, is another wearables developer, albeit not a pure-play in the space, with a big round of late. The startup closed on a $200 million Series C last month to further its vision of an “AI-native platform in which hardware and software converge into a single intelligent system.” The company cited smart glasses as one of the devices in which it envisions incorporating its operating system.
And while wearables is usually understood to be a category for humans, we did mix it up a bit in our list by including Halter, a maker of a platform that combines smart collars and virtual fencing for ranchers to manage their cattle. It closed on $100 million in Series D funding this summer at a $1 billion valuation.
Health and medical conditions
Wearables for monitoring medical conditions are also still drawing investors’ attention with two established names each picking up $100 million financings this year.
San Diego-based Biolinq, which has developed a wearable biosensor that measures glucose levels continuously just beneath the skin’s surface, secured its $100 million round in March. A month earlier, VitalConnect, a San Jose, California-based maker of wearable, connected patches for remote monitoring of cardiac health, secured a round of the same size, led by Ally Bridge Group.
We’re also still seeing some varied startup activity around health-monitoring wearables. An offbeat one that caught our eye was Epicore Biosystems, which develops a wearable that tracks biomarkers in sweat to measure hydration, nutrition, stress and other physiological data.
Deep-pocketed competition
Being in an offbeat niche might provide considerable advantages to a startup. That’s because wearables startups play in a space that also happens to draw the largest technology companies in the world.
From Apple watches to Google Fitbit devices to Meta’s AI glasses, giants with valuations in the trillions are finding appeal in the space. One of Apple’s newest offerings — AirPods with live translation — shows the technological sophistication of wearables is only on the rise.
Even so, we’re betting startups will continue to find ways to innovate in ways that differentiate them from the tech giants. In particular, they have the advantage of marketing to a small initial early-adopter crowd and tweaking a product until it’s ripe for a much wider audience.
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Illustration: Dom Guzman
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