Musely secures $360M from General Catalyst without giving up equity

Musely, a telemedicine platform catering directly to consumers, has successfully raised over $360 million in non-dilutive funding from General Catalyst’s Customer Value Fund (CVF). The company focuses on providing compounded treatments for skin, hair, and menopause care, demonstrating significant growth in its sector. Co-founder and CEO Jack Jia shared with TechCrunch that his company wasn’t initially seeking capital when CVF approached him last year. Founded in 2014 as a wellness community, Musely shifted its focus to prescription skincare in 2019 and has maintained a positive cash flow for several years. Jia expressed his reluctance to dilute his ownership by entertaining traditional venture capital offers, which he had consistently declined. What sets CVF apart from typical venture capital is its structure; it does not require equity stakes or charge interest like conventional loans. Instead, it operates on a revenue-share model: businesses with steady revenue can access capital and repay it with a fixed, capped percentage of their generated income. Initially apprehensive, Jia soon recognized that CVF’s terms were more advantageous than standard bank loans and significantly less expensive than an equity round. Musely has enjoyed an impressive average revenue growth of 50% annually and has serviced over 1.2 million patients. However, Jia highlighted the high costs associated with acquiring new customers in the direct-to-consumer market, noting that scaling to a billion in revenue often requires an equivalent investment. The funding from CVF will empower Musely to enhance its sales, marketing, and customer acquisition strategies, addressing the funding challenges faced by many direct-to-consumer companies. Musely now joins an esteemed portfolio under CVF, which includes notable names like Grammarly, Lemonade, and Ro. Remarkably, Musely has proven to be efficient with its capital. After a $20 million raise from DCM and other investors in 2014, the company has not sought any additional equity funding since then. Musely facilitates patient access to prescription products through asynchronous consultations with board-certified dermatologists and OB-GYNs, exemplifying a forward-thinking approach in telemedicine.