November Edition 2020
Changing the way world sees and thinks about hearing loss is difficult. But it can be done by delivering quality and improving the experience of those who are affected by this problem. San Jose-based Eargo is revolutionizing this space with its sleek proprietary technology and high quality, virtually invisible hearing aids.
Founded in 2010, Eargo is a privately-held company that is innovating in the hearing aids space through its products that feel natural and not intrusive. Their innovative product and go-to-market approach addresses the major challenges of traditional hearing aid adoption, including social stigma, accessibility and cost.
An $100 Million IPO
It is estimated that around 43 million people in the US suffer from hearing loss but approximately just 27% own a hearing aid due to the stigma and inconvenience of the traditional clinic-based model. Eargo is changing these statistics by offering a highly advanced hearing solution that is available to people who need them through a virtual clinic model.
The San Jose, California-based company on a mission to improve quality of life of people with hearing difficulties recently closed $71 million in equity financing. The round of financing was led by Gilde Healthcare and Longitude Capital, with existing investors New Enterprise Associates (NEA), the Charles and Helen Schwab Foundation, and Nan Fung Life Sciences, also participating in the round. As part of the round, Geoff Pardo of Gilde Healthcare and Juliet Tammenoms Bakker of Longitude Capital joined Eargo’s Board of Directors. “We are pleased to close on this financing round, which provides us with significant capital to fund our growth,” Christian Gormsen, president and CEO, said in a statement. The company had previously raised $135 million in total funding.
Now, Eargo has filed for a $100 million IPO with the SEC. The company had booked $47 million in sales for 12 months which ended on June 30, 2020. J.P. Morgan, BofA Securities, Wells Fargo Securities and William Blair are advising on the deal.
The company has experienced an accelerated consumer demand for the hearing loss solutions during the pandemic. The consumers who were reluctant on purchasing the hearing aids through traditional brick-and-mortar clinics have recognized the benefits of Eargo’s solutions.
Eargo launched its latest version of hearing aid in January 2020. It is the company’s fourth-gen Neo HiFi with a rechargeable, budlike design that rests completely hidden with the ear canal. It was released at the price of $2,650 with the promise of better sound quality, more bandwidth, and more personalization options. The device is available for Android and iOS. It allows a user to connect their device over Bluetooth and change settings based on different environments. “These Eargo Neo HiFi hearing aids knock it out of the park for me and I’m totally OK with being 59, about to be 60, and wear hearing aids. Why? They’ve restored the joy of hearing that I didn’t realize I was missing. It’s all about the quality of life,” John Phillips, Eargo client.
In this age of COVID-19 pandemic, wearing a mask is of prime importance. But so is wearing hearing aids for those who experience hearing difficulties. For most people, wearing a mask is a trivial and not-so-difficult a task. But most people with hearing problems who use hearing aids risk losing their behind-the-ear (BTE) device each time they take their mask off. Bear in my mind these hearing aids come at a cost of roughly $3,000. But Eargo’s solutions are not BTE. For such people using non-Eargo products, wearing glasses, masks or hats can be an awkward proposition. Eargo’s products that go in the ear canal cancel out these problems and have become a great solution for such users. Additionally, it has also empowered active professionals, especially, sportspersons by giving them a good alternative. “I’m truly blessed in life. Working with Eargo took my hearing and turned it into a dream. I couldn’t be more grateful,” says Reverend David Moss, a third-generation armed forces veteran on his experience with Eargo.
The Leader Upfront
Christian Gormsen, President and CEO
He is known for his change management and leadership across industries, functions, and geography. He has great general management skills and is known for his professionalization and commercialization expertise. Prior to Eargo, he was the Commercial Director, EMEA at ISS A/S. He won two 2020 Comparably Awards for the categories of “Best CEOs for Diversity” and “Best CEOs for Women.”
He has a M. Sc in Finance and Accounting from Copenhagen Business School.