Craig Elbert spent more than six years as head of marketing at Bonobos, the men's fashion retailer that last month sold to Walmart for $310 million. Now he's moved up the org chart to the founder seat, as head of vitamin startup, Care/of.
The New York City-based direct-to-consumer e-commerce company is trying to make vitamin consumption a cleaner, hyper-personalized experience. The eight-month-old company delivers packets of vitamins and minerals directly to customers' doorsteps for a monthly fee, going up against traditional vitamin retailers like Vitamin Shoppe and Nature's Bounty.
On Wednesday, Care/of announced that it raised $12 million in Series A funding. The round, led by venture capital firm Goodwater Capital, with participation from investors such as Tusk Ventures and RRE Ventures, brings the company's total capital raised to more than $15 million. "The vitamin and supplement industry is ripe for reinvention around a great, personalized customer experience," said Chi-Hua Chien, managing partner of Goodwater Capital, of his decision to invest in the company. "By bringing the experience directly to the consumer and building their brand on honesty and customization, Care/of has emerged as a market leader in an incredibly short period of time." Chien will also be joining the company's board of directors.
Elbert points to the benefits of Care/of's leaner model, a mantra often echoed by the slew of startups--from toothbrushes to mattresses--in the direct-to-consumer space. "You're able to remove a lot of the costs that are particularly prevalent in this industry," Elbert explains. "Rather than producing [the vitamin] and selling it to a distributor who then sells it to a wholesaler, where the price is marked up several times, we don't require a large sales force." With this new cash infusion, he says, the company aims to further trim manufacturing costs by building out automation in its fulfillment centers.
Care/of is the latest startup taking aim at the $39 billion vitamin sector. Ritual, an upstart based in West Hollywood, California, has engineered its own multivitamin based on nine nutrients that it has identified as essential for women. "We spent almost a year researching women's diets today," explains Ritual founder Katerina Schneider, who came up with the idea for the company when she was four months pregnant.
Whereas Ritual sells a $30-per-month subscription box, Care/of's product costs vary. Customers respond to a series of health questions on its website, then receive a custom mix of vitamins and minerals recommended by its online platform, which is built upon the latest scientific research and aided by a team of doctors and scientists. Each individual pill goes for around $5 to $8 per month, and the average order value is around $40.
Both companies also claim to use healthier ingredients. Elbert says that while traditional vitamin companies sell tablets that can contain aluminum and titanium dioxide, Care/of primarily uses natural ingredients, including magnesium from seawater and calcium from red algae in the Icelandic ocean. Ritual has a similar strategy, sourcing its vitamin K2 from Oslo, Norway, and its vegan-certified, vitamin D3 from lichen--which is found in algae--as opposed to the more common sheep's wool or fish liver oil.
Given the lack of regulatory oversight that exists in this space, some nutritionists are wary of companies that purport to deliver a better vitamin. "In theory, vitamins have to be held to a labeling standard," Paul Offit, a pediatrician, told Wired in an interview last year. "But the FDA doesn't have the manpower to really regulate that. For all intents and purposes, it's a system that goes on trust."
Care/of's founders acknowledge that self-regulation has been an issue in the past, but they insist that their startup, which works with third-party regulators, is up to snuff. "We're transparent with our testing and show our research," says Elbert. Ritual, similarly, works with a regulatory firm that inspects the company's labels and claims.
So far, the model has piqued the interest of social-media savvy customers. Care/ofsays it has tens of thousands of users at present, and counts more than 14,000 followers on Instagram, where it posts photos of its own products, along with everything from lemons to puppies to the ultimate signifier of Millennial health: avocado toast.