- Startup founders and investors say the “sextech” category has never been hotter.
- Half of adult Americans have gotten a COVID-19 vaccine, and that could lead to more sex this summer.
- Venture capital funding is flowing to these startups, as investors warm up to the vice category.
- See more stories on Insider’s business page.
Last year, Cake, a sexual health and wellness startup, sold more coconut oil moisturizing cream made for men’s masturbation than any other product it offers.
Now, as more people get a COVID-19 vaccine and leave their homes to mingle, the company says it’s seeing an uptick in sales of lubricants and cleansing wipes created for couples’ sex.
Half of American adults have had at least one dose of the vaccine, and that could spell the end of a year of celibacy for many of them. Some are turning to sexual health and wellness startups to have more titillating and safe sex in the summer of love, startup founders and investors say.
The next several months could be boom times for companies in “sextech” and other sexual wellness businesses, from direct-to-consumer lingerie to birth control delivery. We spoke to five startups that said they’re seeing consumer spending habits change already, including Everlywell, a company that sells at-home lab testing kits for sexually transmitted infections backed by Lux Capital.
The pandemic made getting it on more difficult for everyone. Many stayed put in an effort to stop the spread of the coronavirus and “flatten the curve,” and they had less sex in isolation, according to a study conducted by sex researchers at the Kinsey Institute at Indiana University.
“I cringe to read the tweets that they’re ‘vaxxed and waxed.’ But this will truly be a seminal summer,” Josh Wolfe, a startup investor and managing partner at Lux Capital, tells Insider.
‘Hot vax summer’ is coming to tech
Parade is a three-year-old startup that sells candy-colored underwear and bralettes. It’s caught on with a younger generation of consumers who appreciate its inclusive sizing and commitment to using sustainable materials. The company, which just raised $10 million this week, has noticed sales of “style-driven” underwear increase since the rollout of a vaccine, said its 23-year-old founder and chief executive officer, Cami Téllez. In other words, more people are buying underwear that’s meant to be seen.
Téllez believes there will be an uptick in so-called “revenge spending,” where some people will be more willing to splurge after having been under quarantine for more than a year.
“People are going to want to express themselves again through their clothing and through their sexuality,” she said.
Everlywell is another business that’s growing, according to Wolfe, who’s backed the company. The digital health startup developed an at-home lab testing kit for STIs and can ship a test to customers on a monthly basis for less than the cost of a Netflix subscription.
The startup makes other health diagnostics kits, including COVID-19 mail-in tests that are popular. But its sexual health business has doubled sales since the start of the pandemic, said Julia Cheek, founder and chief executive officer of Everly Health, Everlywell’s parent company.
Cheek says that as young people build habits around coronavirus testing to reduce the risks of dating, they might make testing for STIs part of their routine, as well.
In fact, addressing needs around sex can lead to broader business opportunities, said Varsha Rao, chief executive officer of digital health startup Nurx, known for its birth control delivery service. As more people have begun to meet in person again, the company has not only seen sales of its STI testing kits rise, but also those of its acne treatments and COVID-19 tests, she said.
Investors are getting in the mood, too
Venture capitalists are also becoming less squeamish about sextech.
Since 2020, the seven startups mentioned in this article have raised about $318 million from investors, and have collectively picked up over $475 million since they were founded.
The increased attention on health during the pandemic has benefited sex-focused startups, several entrepreneurs and investors told Insider. More people are coming around to viewing sex as simply another aspect of general wellbeing, they said.
“The stigmas attached to sexual wellness, to mental wellness, to women’s health – for areas that have otherwise just suffered taboos in the past – are coming down, and they’re crumbling at a faster rate than I’ve ever seen in my professional career,” said Sarah Foley, a partner at venture firm SWAT Equity.
Companies like Dame Products, a sex toys startup; Lover, which provides content and personalized suggestions for having better sex; and Dipsea, an app for erotic audio, have all gotten venture backing in the past few years; $4 million, $4.9 million and $5.4 million, respectively, since they were founded.
Startups more explicitly focused on sex can also be viewed through a broader lens of health and wellness, Foley said. She noted Dipsea, which has expanded its erotica bedroom focus to include sleep content, as an example for why she’s begun to take a closer look at sexual health and wellness startups as investment opportunities.
Until recently, certain categories of products, including vibrators and erotica, were pretty much verboten in the investing world. Cindy Gallop, founder of MakeLoveNotPorn, a video site focused on realistic sex scenes, said she struggled for years to sustain her company until an anonymous investor supplied $2 million in 2018.
The first time that Cake cofounders Mitch Orkis and Hunter Morris went out to raise funding, they said they positioned the brand “almost from a skincare perspective.” They also tried to use vernacular that made investors comfortable.
The founders quickly realized that investors “fell into a camp of ‘hell yes’ or ‘no way,'” Orkis said.
For instance, Insider contacted eight other venture capitalists for this story who, despite having investments in the sexual health and wellness or consumer categories, declined to comment.