The Story of WHOOP Technology and its Business
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Hello Friends, Family, and Anyone Else Who’s Reading,
Thank you for reading issue #1 of my newsletter, The Fast Break.
The goal (no pun intended) of this newsletter is to provide readers with insight into the world of the business behind sports, while also providing readers with interesting stories about people, companies, and brands in the space. This newsletter is for the person who wants to follow stories, trends, and insights from the sports business world, but doesn’t have the time or energy to do their own research. My job is to make these insights and stories relevant, easy to digest, and interesting.
To start, I will post this newsletter 2x per week, on Monday and Friday mornings by 6:00 a.m. (ET), so you can have it for your commute to work, your spin on the bike, coffee break, bathroom break, lunch break, you get the drift…
Without further ado, my first issue is on the company, WHOOP.
If you follow the sports world or fitness world closely, you’ve likely heard of WHOOP. If you don’t, you’re about to.
I started wearing a WHOOP band in 2019, and it completely changed how I managed my body and health, consciously or subconsciously.
After a month or two using the band, I realized how alcohol affected my body, how important a proper pre-bed routine was for recovery, what meditation did for breathing and recovery, how much sleep we actually get at night, how important consistent sleep times and circadian rhythm are, and what impacts sleep quality positively and negatively. From the data, I learned when I was overtraining and undertraining when I needed a break, which exercises were harder on my body than others, how to recover properly, and what foods were good and bad for my body.
During the pandemic, the WHOOP band even helped people realize they had COVID-19 before they even knew they had it. Just ask PGA Golfer, Nick Watney.
The Boston-based sports wearable company launched in 2012 and currently employs over 500 people, much of which has accumulated after 2019.
WHOOP is a wearable technology that’s mission is to “unlock human performance”. It coins itself as the latest, most advanced fitness and health wearable available. With WHOOP, you can monitor your recovery, sleep, training, and overall health. WHOOP also offers personalized recommendations and coaching feedback. Its goal is to help users understand their bodies and inner potential. Designed for the 24-hour performance lifestyle, its goal is to positively change behaviour, provide actionable recommendations and avoid overtraining.
You might be thinking, “Isn’t this a FitBit or an Apple Watch?” … No, it’s not.
WHOOP is a data machine. WHOOP collects 50-100 megabytes of data per person per day. On top of that, WHOOP samples data about 1,000-10,000 times as much as FitBit or an Apple Watch. Why? To continuously monitor and understand the human body. The nylon band equipped with sensors is designed to gather data to measure everything from exertion levels to sleep patterns to help users improve their overall health. Using the data, WHOOP provides users a continuous and personalized understanding of Strain, Recovery, and Sleep to balance training, reduce injuries, and predict performance.
WHOOP’s origins began in professional sports when it initially offered its tech to the best athletes in the world. Two of its first 100 users were LeBron James and Michael Phelps. Next, a partnership with the NFL Players Association. Then, the MLB. Then, the U.S. Navy Seals. More recently, the PGA has taken its partnership with WHOOP to the next level with in-tournament metrics being observed. WHOOP partnered with the PGA and offered an on-screen heart rate monitor overlay on their broadcast of the Ryder Cup, where the golfer’s heart rate was displayed on screen during tee-off.
In October 2020, the company closed a $100 million financing round, valuing it at $1.2 billion. Investors at the time included, championship-winning golfers, Rory McIlroy and Justin Thomas, NFL wide receiver Larry Fitzgerald, two-time NBA Finals MVP Kevin Durant, via ThirtyFive Ventures, and Super Bowl MVP, Patrick Mahomes, who at 25 already has a ridiculous investment portfolio.
Other major industry players investing in 2020 included IVP, who led the round, along with SoftBank Vision Fund 2, Accomplice, Two Sigma Ventures, Collaborative Fund, Thursday Ventures, Nextview Ventures, Promus Ventures, Cavu Ventures, and D20 Capital. At the time, CEO Will Ahmed explained that a lot of the capital would go towards investing in membership, the overall experience, software, analytics, and hardware. All these investments were focused on developing the product as a 24/7 life coach to tell users how to improve. WHOOP’s business model is based on a subscription service where users sign up for a monthly subscription starting at $18 USD (on an 18-month plan) and the wearable devices are included for free.
In August 2021, the company closed its Series F round of funding which brings its total funding to $405 million. The Series F round was led by Softbank’s Vision Fund 2, putting a $3.6 billion valuation on the company. Interestingly, the company cited its rapid growth due to membership offerings over the preceding year as the motivation behind the additional funding, which was likely driven in part by the decision in 2019 to make the at the time $500 wearable “free”, while focusing on a subscription service that starts at $18 USD a month for an 18-month membership.
One of WHOOP’s strategies post-Series F is international expansion beyond the United States. Using the massive influx of cash, WHOOP will also focus on research and development for its hardware, software, and analytics solutions, and of course, more employees.
In September 2021, WHOOP announced its new band, the WHOOP 4.0. The new band is 33% smaller than the 3.0, has 4x the number of photodiodes and 5 LED’s. The new band also includes haptic technology to wake you up without a noisy alarm.
What made announcement day for the WHOOP 4.0 interesting was that beyond their CEO, Will Ahmed, speaking about the newly launched products, including the new band and a new “smart” apparel line, WHOOP continued to leverage their strong elite athlete relationships by including the following athletes in their September 2021 announcement day:
28-time Olympic Medalist, Michael Phelps
World No. 1 golfer and Olympic Gold Medalist, Nelly Korda
PGA Tour Golfer, Nick Watney
Best-selling Author and Motivational Speaker, Tony Robbins
World Champion Driver, Tom Daley
PGA Tour Golfer, and champion, Rory McIlroy
Olympic Medalist, Gabby Thomas
Each of the athletes spoke about their relationship using the product while also explaining how the product works, something that, in my opinion, speaks to the consumer population better than anyone else could.
Despite potential shortcomings in its analytics, WHOOP’s high-quality product is continually used and promoted by elite athletes like those mentioned above. By building these relationships, the business only continues to grow and convert buy-in from the public. WHOOP also made massive strides during the pandemic due to its ability to potentially predict COVID-19 in some users.
With all the good press, another round of funding in the books, and significant long-term partners in venture capital, along with elite athlete backers and users, WHOOP looks to be on the path to becoming the market’s giant unless companies like OURA, Apple, Fitbit, Amazon can outpace it or deliver a better product.
Thank you very, very much for reading. We’ll chat on Friday when I send out the newsletter discussing Lebron James’ SpringHill Company.
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Cheers,
Kendal