The $1.8 trillion global wellness market, coupled with advancements in biometric tracking and health technology, has investors banking on the future of wellness.

Renowned cyclist and endurance athlete Lance Armstrong’s Next Ventures is the latest VC fund to get in on the wellness craze, targeting $100 million — its first fund in almost five years — to invest in whole-person health, preventive care and diagnostics.

Next Ventures managing partner Julian Eison, was forthright:

“We said, hey, this whole consumerization of health is omnipresent,” Eison told PitchBook, which reported on Next Ventures’ plans to write pre-seed, seed and Series A checks with an average check size of $2 million. 

It’s a viewpoint shared by other leading investors and experts.

As Jon Canarick of North Castle Partners, Mark Grabowski of Snapdragon Capital Partners and Lance Dietz of KB Partners shared during Athletech News’ DISRUPT 2023 video series, there is an overall sense of optimism surrounding the health, fitness and wellness markets. 

“I think almost universally there’s growth in consumer expenditure in health and wellness across multiple categories,” Grabowski said, noting that the industry as a whole is on an “upward trajectory.” 

Wearables Track More Than Just Fitness

He also indicated that health and fitness trackers have even more runway, especially with consumers embracing preventive wellness practices. Advancing technology also means that wearables no longer cater to elite athletes or weekend warriors. Instead, consumers of all ages and in any health condition can track their health metrics, widening the available consumer market.

“When you think of everything from blood testing to stool samples, there you’re actually addressing some different issues,” Grabowski pointed out. “It’s not about, ‘Am I optimizing my workout performance?’ It’s about allergies, chronic issues, immune responses and other things that people are dealing with.” 

Investors are taking note, with Ultrahuman’s multi-device ecosystem the latest funding recipient. The company just secured $35 million in a Series B to advance its health monitoring endeavors, which include a smart ring, a continuous glucose monitor (CGM), a ‘Blood Vision’ system and an upcoming home health device that assesses environmental impacts on well-being. 

Next Ventures’ portfolio touts some notable health and wellness names, including smart ring brand Oura, AI wearable company Humane and Genopets, a move-to-earn game. The VC fund also invested in Utah-based Amp Human in 2019, maker of PR Lotion, which merged with Momentous, a ‘human performance” supplement brand.

As for Oura, the smart ring maker is expected to enter a “health-focused” chapter, having recently welcomed an executive from the Apple Health team and signing a deal to make its wearable device FSA/HSA eligible. 

Wellness CPGs Gain Steam, Too

Tech may always be a hot area for its jaw-dropping capabilities that seem to advance each week, but good old consumer packaged goods have been receiving the attention of investors, too — especially those in the wellness categories. 

Even major retailers like Target are banking on the wellness wave, introducing over 1,000 health-supporting products across all verticals. For good reason, too: consumers have not only become more health-conscious, but GLP-1 users have redirected their spending away from unhealthy items and toward wellness purchases.

Bloom Nutrition, a supplement brand in the greens and superfoods category recently scored a major investment from C4 maker Nutrabolt. 

Health and wellness guru/A-lister Gwyneth Paltrow, no stranger to all things green juice and longevity-supporting, is also eyeing the power of products with wide appeal. The goop founder has turned feeling good into a profitable brand, catering to the masses with a new line of budget-friendly wellness and beauty products, a departure from goop’s higher-priced items. 

Paltrow’s Los Angeles-based VC firm, Kinship Ventures, has reportedly sought to raise $75 million for its debut fund, eyeing early-stage consumer goods and tech companies.

Over on the East Coast, Humble Growth, a N.Y.-based growth equity firm launched by an all-star team that includes RxBar founder Peter Rahal, secured over $312 million for its debut. Earlier this year, Humble Growth acquired a significant minority stake in Momentous in a deal worth $32 million.

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Goop, the brand founded by A-lister and health and wellness lifestyle guru Gwyneth Paltrow, has launched a new product line for cost-conscious consumers, Good Clean Goop. The 14-piece collection, priced from $20 to $40, is now available at Target and Amazon. The latest offering touts “beautiful clean essentials” for those “clean-curious to the goop-curious and beyond.”

The new good clean goop products span skin, body, hair and wellness, promising to combine science and nature with plant and superfood-derived ingredients for the best results. The brand, founded on its commitment to ethically sourced and cruelty-free ingredients when possible, ensures its beauty products are formulated without silicones, formaldehyde donors, parabens and synthetic fragrances. 

Wellness chews, $30, are also part of the launch, with Bodyguard Immunity Chews, Skinspiration Beauty Chews, Brain Boost Daily Chews and Pleasure Seeker Daily Chews.

“Goop Beauty is defined by best-in-class, clinically proven ingredients used at active levels and the way that everything feels exquisite,” said Paltrow. “We’ve learned a lot along the way as we’ve built Goop Beauty, and now we’re thrilled to be able to launch a new brand — Good Clean Goop — that meets our strict clean standards at an accessible price point.”

Leaning into offering more budget-friendly products may prove to be a hit with younger consumers like Gen Z who are eager to purchase clean products without breaking the bank. While the new Good Clean Goop line features products under $40, Goop Beauty’s top-selling items, such as Microderm Instant Glow Exfoliator and its Lift + Depuff Eye Masks, are priced at $125.

Good Clean Goop is part of the web-like network of the original Goop, which originally launched as a lifestyle and wellness-themed newsletter before morphing into other entities, such as e-commerce, pop-ups, wellness summits, a magazine and a podcast. Goop Beauty soon followed, as did a deal with Sephora in 2020. 

Although Goop has been wildly successful (perhaps a testament to the advice Paltrow received when naming the company its rather unusual name — she once said she was informed that successful internet companies have double O’s in their name), it has also drawn the ire of critics. Despite being worth $250 million, Goop has been challenged as being out of touch for the everyday consumer, promoting “snake oil” remedies and settling out of court after it was sued for false advertising.

Still, there is a significant demand for clean and natural products. Consumers are eager to spend their hard-earned dollars on wellness, with the industry now a $1.5 trillion global market growing at a rate of 5 to 10% each year, according to McKinsey.

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The Federal Trade Commission (FTC) has issued a strong warning to hundreds of advertisers, including many large companies in the health and wellness space, that they must back up their product claims or risk facing large civil penalties. The move is intended to avoid consumer deception through product claims that cannot be supported or substantiated. 

According to FTC law, any claim a company makes about a product’s health or safety benefits must be supported by scientific evidence. If a company claims its product can cure, mitigate or treat a serious disease, such as cancer or heart disease, that claim must be supported by accepted scientific testing standards.

The FTC issued penalty notices to 670 companies in the over-the-counter drug, homeopathic product, dietary supplement and functional foods sectors, including Amazon, Bayer, Johnson & Johnson, Walmart, Bausch + Lomb, GNC, The Vitamin Shoppe, Goop, Zarbees, Your Superfoods, NuLeaf Naturals and Charlotte’s Web.

A complete list of companies that received the notice is available on the Commission’s website, although the FTC points out that being included on the warning list doesn’t suggest that a business has necessarily engaged in deceptive or unfair conduct. 

However, some of the 670 businesses that received notices have faced scrutiny in the past. Goop, in particular, has long been given the side-eye from those who accuse the brand of peddling pseudoscience. 

In 2018, the company agreed to pay $145,000 to settle a false advertising lawsuit filed by California officials who claimed that Gwyneth Paltrow’s company made unfounded health claims about three of its products on its website. The items included a blend of essential oils that Goop claimed fights depression and jade and quartz eggs that Goop advertised as possessing sexual energy and health properties. 

Another celebrity-backed brand, The Honest Company, Inc., settled a nationwide class action lawsuit in 2017. While the company, founded by actress Jessica Alba, denied wrongdoing, the lawsuit alleged The Honest Company misled buyers about its product ingredients. The Honest Company is among the recipients of the FTC’s recent letter.

Zarbees was also hit with a class action lawsuit, with allegations that the company mislabeled the content of melatonin in its supplement designed for children. 

The 670 companies on the warning list are now officially on notice that they may face significant civil penalties if they fail to substantiate their product claims adequately, says the FTC.

“The requirement for advertisers to have adequate support for their advertising claims at the time they’re made is a bedrock principle of FTC law,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection, in a statement. “The prospect of steep civil penalties will help ensure that advertisers don’t play fast and loose with the truth.”

With the increased pursuit of health and wellness coupled with the trauma of the pandemic, many consumers are investing in their health through tech wearables, vitamins, supplements and food and beverages. Whether consumers are looking for the fountain of youth, searching for endless amounts of energy, looking for restful sleep, hoping to remain calm or creating an immunity defense, a product is waiting on a shelf for their every desire.

According to one study, dietary supplement sales increased by 5% in 2019 over the previous year, but sales surged during the first wave of the COVID-19 pandemic, with a 44% increase in sales. The pandemic led to a demand for multivitamins that spiked in March 2020, with sales increasing by 51.2%. While the pandemic prompted an increase in supplements and vitamins, health and wellness is still a thriving industry that shows no signs of slowing down.

Consumer interest in health and wellness has continued, especially post-COVID, reports McKinsey & Company. Roughly 50% of U.S. consumers report wellness as a top priority, a significant rise from 42% in 2020. 

Consumers are willing to pay when it comes to wellness, even during economic challenges. One survey, conducted by Restore Hyper Wellness, revealed that 62% of 2,000 Americans said that health and wellness preventative spending would be the final category they reduce spending in during a recession. 

Millennials are especially leading the way with wellness purchases, and as McKinsey revealed, the importance of influencers and celebrities continues to rise when it comes to brand discovery.

McKinsey’s findings on wellness purchases influenced by celebrities are notable, as the FTC indicated that warning letter recipients were provided notice regarding the use of endorsement and testimonials. As the FTC explained, the notice addresses falsely claiming an endorsement by a third party, misrepresenting whether an endorser is an actual, current or recent user, using an endorsement to make deceptive performance claims, failing to disclose an unexpected material connection with an endorser and misrepresenting that the experience of endorsers represents a consumer’s typical or ordinary experience.

The FTC says the notices of penalty offenses allow the Commission to seek civil penalties of up to $50,120 per violation against any company that engages in conduct that the company is aware has been found unlawful in a previous FTC administrative order other than a consent order.

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Actress and health and wellness businesswoman Gwyneth Paltrow is looking to push further into the feel-good space as her venture capital firm aims to raise $75 million for its debut fund, according to a recent report by Axios.

Kinship Ventures, the Goop CEO’s venture capital firm based in Los Angeles, is looking to invest in early-stage consumer goods and technology companies. 

The VC firm says it has an experienced team well-versed in ed tech, health tech, and high-tech growth, as well as beauty, essentials, wellness, and food, and it has a track record of being at the forefront of emerging categories.

Axios reported typical check sizes will range between $500,000 and $3 million.

On LinkedIn, Kinship Ventures describes itself as a small team of under five people and is experiencing “rapid growth.”

According to Pitchbook, Paltrow’s co-founder and managing partner in Kinship Ventures is Moj Mahdara, CEO of Beautycon Media and an entrepreneur in the entertainment, digital, and emerging technology sector.

Mahdara recently posted on LinkedIn that Kinship Ventures was hiring and had “lots to do.” 

“We are looking to add exceptional people with a background in investment/finance/business development who are looking to make a difference in the investing and advisory world,” the post continued.

The VC was looking for a remote-based Principal to provide high-level, hands-on administrative and project management support, but the job posting is no longer accepting new applicants.

Last year, Kinship Ventures invested in MoonPay, a cryptocurrency payment platform, in a celeb-backed funding round that included investors such as Justin Bieber, Bruce Willis, Snoop Dogg, Drake, and Ashton Kutcher.

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Gwyneth Paltrow’s oft-discussed wellness and lifestyle brand goop is venturing into the latter part of 2022 across the seas of the Italian Riviera and France. The Academy Award-winning actress’s company and Celebrity Cruises have partnered up to give those seeking some time away for self-care and relaxation for their nine-night ‘goop at Sea’ cruise. Lucky cruise goers aboard the Celebrity Beyond ship will have the chance to immerse themselves in exclusive goop-led wellness sessions, receive goop-curated gifts, sip goop smoothies, and also have the opportunity to ask Paltrow herself in person.

Celebrity Cruises Chief Marketing Officer Michael Scheiner states, “Nowhere is more rejuvenating than the open sea, and Celebrity Beyond has been designed by a dream team of contemporary, inspiring icons to give guests endless opportunities to disconnect from the world — while they simultaneously reconnect with the world around them. Goop is the perfect partner for us to collaborate with to capture this therapeutic essence of the ocean in a really relevant and meaningful way for our target audience.”     

Paltrow made her own goop at Sea announcement on her Instagram account earlier this week. With a selfie overlooking the sea, she began her caption with the following statement, “Care to join me and some of my favorite practitioners in the Italian Riviera and France?” 

goop and Celebrity Cruises’ partnership began in early 2020, with Paltrow serving as the cruise line’s well-being advisor since 2021. The celebrity’s job has afforded her the opportunity to arrange a number of enviable wellness amenities on Celebrity Cruises ships, including on-demand wellness classes and custom fitness tools for guests.

The nine-night goop at Sea cruise ship will depart from Barcelona on September 24, with stops at Provence and Nice in France as well as Santa Margherita, Florence/Pisa, Sicily, Naples and Rome in Italy. Itinerary information, ticket prices and more can be found on celebritycruises.com.

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