Spurred by an increase in global demand for sexual wellness products, Germany’s WOW Tech Group has merged with UK-based online sex toy retailer, Lovehoney, to form the Lovehoney Group at a $1.2b valuation. This new European company expects to generate sales of more than $400 million this year, making it the world’s largest sexual wellness company by revenue. Lovehoney Group will operate with over 650 employees across North America, Europe & Asia, and plans to scale via additional acquisitions.
The global growth of the sex toy market
Grand View Research reports that global sales of sex toys grew 26% to $33.6 billion in 2020 and the global sexual wellness market is projected to be valued at $41.6 billion by 2027. However, some analysts argue that those metrics are conservative and project the market to reach $108.32 billion by 2027. The forecast is based on factors such as broadening social acceptance of sex toys by both sexes and regulatory changes in Asian countries that are making the products more widely available.
The merger marks a breakthrough in the sexual wellness industry, proving that late stage high valuations are possible, as evidenced by consumer appetite and the growing de-stigmatization of sexual wellness. We’re seeing this shift in the market in the early Seed and Series A stages as well. In 2017, VC funding was not flowing to sex toy companies and early pioneers instead turned to crowdfunding platforms to secure growth capital. In recent years, however, a few sex tech startups have succeeded in securing VC funding.
Which companies are leading the charge in closing the sexual wellness gap?
Early pioneers in closing the sexual wellness gap include:
- Dame Products, a portfolio company of Amboy Street Ventures and a leader in the Sexual Health arena, secured a $4M Seed round in the last days of 2020.
- maude, a sexual wellness company, closed an oversubscribed $5.8 million Series A in June, marking it one of the most VC-backed sexual wellness personal care companies. Today, maude’s cumulative raise is over $10 million.
- Unbound Babes, which has been making pleasure fashionable since 2014, but only closed $3.7 million in Seed funding back in 2017 and 2018.
- Lora DiCarlo, the sex tech company dedicated to bringing human-like robotics to sex, secured a $2 million in Seed funding in May 2019 and brought on celebrity model Cara Delevingne.
- MysteryVibe, a sexual wellness medical device company, amassed over 530 investors and reached 127% of its fundraising goal for its first ever equity crowdfunding campaign on Seedrs.
- Tabu, maker of a personal massager and organic lubricant created for women in peri- to post-menopause, has closed a $500,000 Seed round and entered Goop’s selection.
As we see more data points of high valued, late stage sex toy companies; we predict that more VCs will fund early stage companies in the industry, causing a much-needed eruption of innovation in the sexual health space.
Click here if you missed our first ASV Insights column which looks at the fertility support system American workplaces can provide through companies like Maven, Progyny and Carrot. Next time, we consider the rise of a hybrid model of healthcare that combines bricks and mortar with telehealth services.
