Health and wellness startup HealthifyMe on Wednesday said it has raised $30 Million in a pre Series D funding round led by impact investor LeapFrog Investments and OpenAI investor Khosla Ventures.
The company declined to comment on the valuation. The funding round includes venture debt of about $5 million. “The round has been raised as a convertible note, pegged to the next round, so no new valuation has been set,” a source familiar with the deal told ET.
Several startups are looking to raise capital via convertible notes as late-stage startups growingly face difficulties to pick up equity capital in the current environment.
FinnFund, a Finnish development financier and Van Lanschot Kempen, a Dutch investment firm as well as existing investors Unilever Ventures, Chiratae Ventures, Blume Ventures and HealthQuad have participated in the round, as per a statement from HealthifyMe.
The investment will be channelled towards advancing the company's artificial intelligence capabilities, acquiring talent and global expansion, the statement added.
Including the new round, the Bengaluru-based startup has raised $130 million in total. It had last raised $75 million in a funding round in July 2021, led by Leapfrog, US-based venture capital investor Vinod Khosla and Elm, Saudi Arabia’s public investment fund.
Founded in 2012 by Tushar Vashisht, Sachin Shenoy and Mathew Cherian, the company offers services such as calorie tracking, one-on-one nutrition, fitness coaching, diet tracking, and workout plans.
HealthifyMe said it is currently set to augment the capabilities of Ria, its AI-powered virtual nutritionist, by infusing it with generative AI. It is also retrofitting its coach facing system with generative AI.
“Leveraging Large Language Models (LLMs), vision technology and data from millions of HealthifyMe’s new offerings will help improve diet & fitness habits in a more intuitive, precise, and personalised fashion than ever significantly accelerating improvement in metabolic health and fat loss across language and cultural boundaries,” the statement said.
With a user base of over 35 million across over 300 cities, HealthifyMe said it is on a growth trajectory to achieve $50 million in annual recurring revenue (ARR) in the upcoming months. In April 2022, HealthifyMe was mulling an initial public offering (IPO) and an ARR of $200 million by 2024.
Macro-struggles
In January, ET had reported how late-stage startups such as Udaan and PharmEasy shore up capital through debt instruments like convertible notes.
Convertible notes, which will convert into equity at a later date, require no valuation to be ascribed to the startup currently. With desired valuations not coming their way, startups are resorting to these debt instruments to tide over the economic whiplash where cautious investors are demanding better unit economics and a path to profitability.
HealthifyMe had laid off 150 employees to focus on profitability amid changing market dynamics in December 2022. “Like much of technology, growth hasn't kept pace with expectations and hiring. We are also undergoing an evolution with our new vision around metabolic health (HealthifyMe 2.0) which requires different resources,” it had said back then.
