Every week I breakdown startup pitches with the added hook that you can invest whether you’re accredited or not (if you don't know what that means, click here).
I base my review on a 3-minute founder pitch and some light diligence.
My scoring system is not a validation of idea, or grading for likelihood of success. It just means, all things being equal at launch — this startup has these boxes checked.
What I look for:
Founder — ability to lead, sell into and influence a given market
Idea — is it inevitable or solving a BIG problem in a scaleable way
TAM — how big is the total addressable market
Traction — do they have meaningful early traction
Unfair Advantage — do they have a competitive edge
Key People: Cary Breese (repeat CEO w/ Fortune 500 experience), Sumeet Shoekand (Technology executive with 19 years of experience)
Traction: NowRx generated over $13.4M in revenue in 2020, a 90% YoY increase from 2019 and in H1 of 2021 it drove nearly $10M in revenue (70% YoY increase) with more than 35k customers and 400k prescriptions delivered, across five territories. NowRx is also going after the massive $60B global telehealth market.
Terms & Takeaway
Invest in NowRx here 👉 Term Sheet
Security Type: Preferred Equity
Pre-Money Valuation: $275,000,000
Raised (as of publishing): $10,582,583
Minimum Investment: $998.00 ($10.50/share)
Here's what I like: Prior to the pandemic I thought telehealth was a waste of time, that of course was before I ever used it. Since 2020, myself, my wife and our two young children have relied on telehealth almost exclusively — and we’ll continue to do so.
It saves a ton of time and headaches, it saves money on wasted visits and tests and let’s be real… we do everything else this way already 🤷♂️. Additionally, the concept of prescription delivery (don’t get me started on the abuse factor, misuse is already rampant across the country) is utterly genius!! Have you ever NOT waited 45 minutes in line at Walgreens? NowRx gives you all that time and pain in the ass back!
Lastly, I actually have spent a decent amount of time interviewing people in this space, from Capsule (which recently raised at well over $1B valuation) to VillageMD which has a multi-billion dollar partnership with Walgreens to bring medical facilities to your local pharmacy (a tele-bridge if you will)
Here's what I don't love: There is nothing about NowRx that I don’t like, from a business perspective. The team is outstanding, customer reviews are pretty high for a notoriously pissy customer demo and their growth is outstanding — regardless of the Covid boost. That said, the space will get increasingly more competitive over the next few years and weirdly, NowRx may run into some of the same resistance that food delivery startups like GrubHub have as providers claw back some of their margin.
Who should invest and why: Just to be clear, this is a full blown $75M Series c valuing the company at $275M, not your usual Reg CF or early stage startup. If you believe in the future of telehealth, concierge medicine and pill delivery — this is a safe bet.
With a $998 minimum investment, this deal is on the pricier side to get any real allocation, but FAR lower risk. From my personal investing perspective, I’m a big fan of placing small bets on Series A, B, C and pre-IPO deals, but my expectations are different for each. I like to throw a little bit of money into Seed and Series A deals with an expectation of 8-10x returns, but as I invest into Series B, C and pre-IPO, my expectations shift closer to 2-5x returns with much shorter horizons.
If you’re interested in participating in larger, later stage startups, this is a great entry point, BOOMING market, inevitable adoption and a proven leader.
As always, startup investing is super high-risk, anything can happen.
Invest in NowRx here 👉 Term Sheet
Questions, DM me 🤳 @kitun.