Squared Circles Gets $40M To Launch New Health & Wellness Brands
Backed by L Catterton, the incubator is eyeing projects including nutritious food products for GLP-1 users, tasty functional medicine for children and whole-body health for men
Venture incubator Squared Circles has closed a $40 million Series A funding round to launch and scale at least five health and wellness brands over the next three years.
The funding news follows a McKinsey market report finding that 82% of U.S. consumers now deem wellness a top priority, with Gen Z and Millennial consumers purchasing more wellness-centered products and services than prior generations.
Private equity firm L Catterton led the recent funding, following a previous investment in Squared Circle’s seed round.
Founded by Alexander Gilkes, Osman Khan and Lukas Derksen, Squared Circles has invested and exited in hair wellness company Nutrafol and has a vast portfolio that includes Magic Molecule, a line of skin-healing solutions, Algae Cooking Club, a healthy cooking oil brand and Freaks of Nature, a high-tech outdoor skincare brand co-founded by pro surfer Kelly Slater.
Khan, Squared Circles’ co-founder and CEO, noted that the incubator wants to work with scientists to shape a future where products benefit both consumers and the planet.
“We are excited to collaborate with leading consumer-focused investors such as L Catterton, who not only share our long-term vision for creating transformational brands and our dedication to ingenuity and sustainability but also bring the extensive consumer expertise and deep operational knowledge that will help support our future endeavors,” Khan said.
In its incubation (stealth) category, Squared Circles lists six projects, including nutritious food products for GLP-1 users, tasty functional medicine for children, a sustained energy and cognitive function initiative and one centered on sperm and whole-body health for men, aptly titled “Project Swimmers.” The venture studio says it uses an “AI-enabled playbook” to commercialize product launches in 12-18 months and licenses bioscience IP.
Investors Eye Wellness
What’s behind the continued wellness wave? According to McKinsey’s hypothesis, consumer interest in health and wellness was already gaining momentum before COVID-19, but the onset of the pandemic opened the floodgates.
“There was this massive shock to many people’s lives and in such a way that it really made people much more conscious of their health and what they could do to be proactive about taking their health into their own hands and living a long and healthy life,” said Mckinsey partner Anna Pione on a recent episode of The McKinsey Podcast.
Even saddled with student loan debt and navigating housing affordability challenges, Gen Z and Millennials are willing to cut back on extras in favor of health-supporting purchases such as functional foods.
The global wellness market was valued at $1.8 trillion, and investors (retailers, too) are clearly paying attention. Among other funding moves, Lance Armstrong’s VC fund Next Ventures is targeting $100 million — its first fund in nearly five years — to invest in whole-person health, preventive care and diagnostics.
Last fall, RxBar and Orgain founders raised $312 million for Humble Growth, an N.Y.-based growth equity investment firm focusing on visionary consumer wellness brands. The firm acquired a significant minority stake in human performance brand Momentous earlier this year in a deal worth $32 million.
