EverlyWell Cofounder and CEO Julia Cheek on ABC’s Shark Tank.
Diagnostics startup EverlyWell’s pitch to investors on ABC’s Shark Tank Sunday night netted CEO Julia Cheek a $1 million deal with Lori Greiner in exchange for a 5 percent stake in the direct-to-consumer testing business. The company claimed it was the largest valuation deal for a solo female entrepreneur in the program’s history. The deal materialized despite skepticism by fellow investors over the cost of scaling a direct-to-consumer diagnostics business.
“My ask was $1 million for 5 percent of the company, which was a $20 million valuation,” said Cheek in a phone interview. Instead, Greiner offered a $1 million line of credit for 8 percent interest.
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EverlyWell’s tests span sexually transmitted diseases, men’s and women’s health from testosterone levels in men to assessing levels of docosahexaenoic acid or DHA in a woman’s breast milk. The polyunsaturated fatty acid can influence brain growth and development. It also has tests for food sensitivity and metabolism.
Cheek noted that the decision to go on Shark Tank wasn’t taken lightly. But she decided that telling the story of her business and educating consumers on EverlyWell’s lab tests on a high-profile television show was a priority and Shark Tank had the potential to give her business a significant boost.
That’s the thinking of many entrepreneurs but the problem is it can just as easily go in a different direction. That risk adds considerably to the stakes when it’s not just about a pitch failing to resonate in a private meeting with investors but on a network show in front of millions of viewers. It’s tough to get on the show in the first place and even then there are no guarantees.
“It’s important to have a shark on board to sell the brand to the consumer market,” Cheek said.
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She also highlighted some of the company’s plans for the coming year, noting that 23andMe has had a big influence on the business.
Like 23andMe has with Target, Walgreens and BestBuy, EverlyWell plans to expand into retailers so that its testing kits can be available to people where they live and work, supporting the company’s customer acquisition strategy, said Cheek. That would be a significant shift from its current model of customers ordering tests online, packaging samples at home and sending them to an affiliated lab.
She added that the consumer testing business is currently collaborating on a product with DNA testing business Helix and said EverlyWell is in talks with like-minded consumer brands on partnership opportunities.
Earlier this year, the Austin-based business raised $2 million in a round led by NextGen Venture Partners, SoGal Ventures, Full Tilt Capital and others
Despite the rise of direct to consumer testing businesses, Senate Minority Leader Chuck Schumer (D-NY) has urged the Federal Trade Commission to investigate informed consent agreements consumer testing companies provide customers, take a closer look at how they safeguard that data and when they share that data with third parties.
Cheek acknowledged that Schumer raises an important issue and said for EverlyWell’s part, the company doesn’t share consumer personal health data with third parties. But she said her company’s goal is to make it easier for patients to share this data, particularly with their physicians. Cheek wants to work with the startup’s customer base so that patients select doctors that they want to be kept informed of certain medical tests.
“In future, if a physician is pre-authroized, we will be able to automatically share test results with them.”
