Consumer startups often get a hard rap in Europe — but the Oura ring, proudly founded in Finland, is about as popular with investors and founders as a Patagonia jacket.
The smart wearable company, which allows users to track their biometric data in pursuit of leading longer and healthier lives, has sold more than two and a half million rings to consumers all over the world. It’s also profitable, projecting revenues of $500m in 2024.
But its job is far from done, Petteri Lahtela, cofounder and former CEO of Oura, told Startup Europe — the Sifted Podcast.
It’s batted away multiple acquisition offers over the years from far bigger tech players, he said, and is instead forging more and more partnerships of its own.
Earlier this month, Oura announced a new $75m funding round from US continuous glucose monitoring (CGM) giant Dexcom, at a whopping $5.2bn valuation, which will enable it to deepen the “completely unique set of data” it has.
That database — plus the dawn of the AI era — puts Oura in a very interesting position, Lahtela said. “Oura is very well positioned in the global markets to become a pioneer of this kind of health-related insight, and a value provider for so many people,” he told the podcast. “I don’t see any reason why Oura couldn’t be a $100bn company.”
Read the lightly edited highlights of our conversation below — or listen to it in full here.
What was the big idea behind Oura, and why did it become a ring?
We wanted to solve a really big problem — chronic diseases. It’s a big, big challenge, and it’s growing fast, and most of the people who are developing metabolic imbalance and eventually diabetes, for example, don’t even know that they’re on track to develop a disease. On top of that, healthcare is incapable of doing anything to prevent the onset of chronic diseases. So my cofounders and I wanted to develop something that would help people learn how their daily lifestyle choices are affecting their body and mind, and what they could do to adjust their lifestyle a bit to avoid the onset of a disease.
Oura’s sitting on a big amount of very valuable and unique data.
We then tested all the wearables available in the market, and we found it’s impossible to wear a heart rate belt for a long time — and the wrist devices weren’t accurate at that time. So we concluded that we’d have to develop something ourselves, and find a way to get very accurate body signals… Rings are the oldest wearables there are, and on the palm side of every finger, we have two veins carrying blood, so we can access accurate signals very easily. The wearing comfort is also really important, because we had to get access to long-term data — we needed people to wear the product 24/7, for weeks and months and years.
Now, Oura has collected almost 10 years of this highly accurate data, from millions of people. So it’s sitting on a big amount of very, very valuable and unique data.
Why focus so much on sleep in the early days?
We dug deep into how this autonomic nervous system imbalance starts to develop. Every one of us has lots of load and strain during the day, both mental and physical, and nighttime is when we should be able to recover from that strain so that we keep performing. We looked at what IPR [intellectual property rights] had been created in the area, what studies supported our approach — that this continuous measurement of these bio-signals would help us to build an understanding of how your autoimmune system balance is developing.
And sleep — and the time when you should sleep and recover — became the main measurement time. It’s a very standardised moment. Nothing is disturbing you, and you get very accurate measurements. You get long-term data and your unique baselines; for your heart rate, heart rate variability, body temperature and breathing rate.
We are all unique. Our physiology is unique. And also our lifestyles are unique. Our body responses to whatever we do during the day are unique. So we need to build baselines for each individual, and then we can quickly see that in relation to your baseline, there is now a change in this variable, and we can combine all those body responses with the understanding of how well you slept and how well you recovered. And then we can give guidance on what you should do, how you should assess your bedtime, or how late you could eat your last meal during the day and so on. So we can derive insights that are meaningful — and actionable — for the user.
What’s the personality of Oura, and has that changed over time? Are you kind of like a parent saying, you need to go to bed earlier?
That’s a really, really good question, and it was something that we were struggling with in the beginning: ‘What are the characteristics, and what’s the voice of this product?’ We wanted to develop it as a companion; a very understanding companion. So it’s not nagging you about what you did last night. It’s always looking forward and trying to help you get back on track and be your best. It’s not your parent, it’s not your grandparent or your coach.
Who were your early adopters, and who are your customers nowadays?
Oura is a pretty demanding product for the end user, because it requires a commitment to the product, and yourself; to this self-reflection and self-observation process that starts automatically when you begin wearing the product. Your body starts to talk to you and reflect on how it is responding to your lifestyle. And it requires commitment to the process, and willingness and capability to do something, to adjust something in your behaviour — whether it’s your bedtime or wake-up time, or something applicable to your chronotype or physiology.
So, we had to think carefully about who was the optimal target audience at the very beginning. We went to talk to the people starting the ‘quantified self’ movement in the US… and we got a really good response from those people. And it’s evolved from the interest of a small amount of people to a really big movement around health optimisation. It’s more inclusive these days as well. So the market has evolved in a nice way for Oura. Our passion has been to be a very meaningful product for our optimal target audience. And we’ve been lucky that this optimal target audience has grown continuously, and now it’s 10s of millions of people.
What’s the end goal? The big long-term vision?
I don’t see any limit. If you think that for almost 10 years now, Oura has been collecting highly accurate physiological data and behavioural data from millions of people. Every day, we get data from millions of people, and it’s growing fast, so we can build more and more value for the end user. So the concentration on the user value-centric approach, it’s kind of getting even more food to build something completely new on top of it. So it’s really, really unique.
In healthcare most of the measurements are the one-shot type — maybe once a year you measure your blood pressure. There’s no continuation. But Oura data is of research-level accuracy, and it’s 24/7, and also it combines behaviour data with health data. It’s a completely unique set of data. It hasn’t existed before. Now we are entering this AI time — and AI is nothing without data — so I would say that Oura is very well positioned in the global markets to become a pioneer of this health-related insight, and a value provider for so many people. I don’t see any reason why Oura couldn’t be a $100bn company.
What is being done with the data, and what could be done with the data?
There’s still many use cases that haven’t been brought to the users yet, especially from the longitudinal data. We saw during Covid time that our users started to notice that Oura revealed that you’d been infected three days before you got any signs yourself. We can get more and more of this kind of, for example, heart-health-related data that helps to prevent the onset of some diseases or conditions that may lead to more severe situations. It’s the only way to really get into the prevention of diseases, but also to really help build up a deep understanding for each individual of what they can do to stay healthy and live longer.
One common criticism of preventative health companies is that they tend to be used by people who are healthier and wealthier. What needs to happen to make preventive healthcare a thing, and for it to be helping save billions of euros for public healthcare systems around Europe or the world?
It’s self-evident that wearables data needs to be used in healthcare. There’s no other way to solve this big issue in preventative healthcare. That is a huge opportunity, and for Oura, it’s a big mission.
This collaboration with Dexcom is one step forward in the big vision to help those people who have already developed a chronic disease. With diabetes, for example, if you can avoid the onset of those diseases that come from diabetes and may lead you to lose your leg or your vision, that’s also valuable.
The challenge in healthcare is that they are still too reliant on what they call clinical or medical data and they don’t accept the wearables data. They should understand how accurate it actually is, and understand that when you collect data in normal daily life, 24/7, [it’s far more valuable than] the one-shot measurements, especially when it comes to preventative healthcare.
How serious is the competition from Apple Watch, or Samsung’s ring?
We have never been worried about those competitors; we don’t see them as competitors. We are building this market together; everyone acting in this market and bringing more knowledge to the different target audiences, and adjusting their product or service based on that, is collaborating. The market potential is huge — and the market is growing faster than any of these companies, even Apple. There are more people to serve than any of us can serve, so competition is not a problem at all. It’s something that’s helping us create better solutions for people.
Have you ever been approached by one of those companies to be acquired?
Yes, early on — and at every step.
Why didn’t you take the offer?
Our ambition level is high. We intend to create meaningful value for the end users and to keep up with this user value-centric design approach. So why would we join some bigger player? There’s still room for us to do what we are aiming to do.
Is the end goal an IPO?
An IPO is not an end goal. If Oura does IPO, it just means that we may have more resources to serve more people. It’s not an end goal in any sense… Maybe it is for investors who want to exit from the company, but I’ve never thought of IPO as an end goal. The end goal is that we can, let’s say, get rid of diabetes completely.
You personally stopped being day-to-day operational in the company a few years ago. But you’re still clearly extremely passionate about this topic, and the job is not yet done. What made you decide that the time was right to not be 120% on the company anymore?
Oura is already flying on its wings, so it doesn’t need us founders. There are already better people in the top management to lead the company to the next level. Of course, we’re happy to help in every way and support and promote the company. But now we’re helping the next wave of new companies, and we have much more resources to do that and learning experiences and networks, and we know plenty of people… We can also help them find the right ambition level, and stay clear with their intention: why they are doing what they are doing, who they are serving, what’s their optimal target audience, and how they really provide value. Those are the important questions where we can help.
What’s one bit of advice you would give to someone setting out to start a health or wellness company today?
Start early, respect other people, be kind and stay clear with your compassion and your ambition. Try to find meaning in everything that you do; that’s the best motivation. When you establish a company, there’s lots of volatility; there are moments where it feels like the whole world is collapsing on top of you — and the only thing that carries you through those moments is your passion for creating something very meaningful. So that’s the key.
Read the orginal article: https://sifted.eu/articles/oura-petteri-lahtela-sifted-interview/
