SAN JOSE, Calif., July 29, 2020 /PRNewswire/ -- Eargo, a medical device company on a mission to improve the quality of life of people with hearing loss, today announced the closing of a $71 million equity financing, led by new co-investors 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. Geoff Pardo of Gilde Healthcare and Juliet Tammenoms Bakker of Longitude Capital will join Eargo's Board of Directors.
The financing provides Eargo with additional capital to expand commercialization during a period of accelerated consumer demand for its direct-to-consumer hearing loss solution. Eargo has removed the traditional barriers preventing people from taking control of their hearing loss. With Eargo's virtually invisible, rechargeable, completely-in-canal, FDA regulated, exempt Class I hearing aid, online hearing screening and telecare consultation and support, customers can learn about and purchase a highly advanced hearing solution from the comfort and safety of their homes.
According to a survey conducted by The Hearing Review in May 2020, approximately 75% of audiology clinics in the US and Canada were actively accepting patient visits, and yet most of these clinics were seeing average revenue of less than 50% of pre COVID-19 levels.1 In contrast to the dynamics in traditional distribution channels, Eargo has experienced significant revenue growth in 2020, with year-over-year growth accelerating in both 1Q20 and 2Q20.
Christian Gormsen, President and CEO, said, "We are pleased to close on this financing round, which provides us with significant capital to fund our growth. While our business was performing well before COVID-19, the pandemic accelerated consumer demand for our hearing loss solution. More consumers who are reluctant to purchase their hearing aids through the traditional brick and mortar clinics have recognized the benefits of our solution."
Geoff Pardo, General Partner, Gilde Healthcare, said, "While it is estimated that approximately 43 million people in the US suffer from hearing loss, only approximately 27% own a hearing aid, largely due to the stigma and inconvenience of the traditional clinic-based model. Eargo has revolutionized the hearing loss solution, offering a highly advanced hearing solution available through a virtual clinic model. We're excited to be a part of the Eargo team and their vision to transform this market, bringing it into the 21st century."
Results of the Covid-19 Impact Survey #3 (May 13-22) for Hearing Healthcare Practices The Hearing Review: https://www.hearingreview.com/practice-building/marketing/surveys-statistics/covid-19-impact-survey-3-may-13-22-for-hearing-healthcare-practices
Juliet Tammenoms Bakker, Managing Director and Founder of Longitude Capital, said, "A hearing solution developed with the consumer in mind was long overdue. Eargo has truly put the consumer first, from consultations and solution design to buying experience and highly rated customer support. We are delighted to partner with Eargo to help fuel the growth of this unique business."
Josh Makower, General Partner of NEA and Chairman of the Board of Eargo, said, "We are delighted to welcome Gilde and Longitude as our new partners in transforming this industry and helping to fuel Eargo's continued growth. We welcome Geoff and Juliet to the Board and look forward to their contributions in the years to come."
Eargo is a medical device company dedicated to improving the quality of life of people with hearing loss. Our innovative product and go-to-market approach address the major challenges of traditional hearing aid adoption, including social stigma, accessibility and cost. We believe our Eargo hearing aids are the first and only virtually invisible, rechargeable, completely-in-canal, FDA regulated, exempt Class I device for the treatment of hearing loss. Our differentiated, consumer-first solution empowers consumers to take control of their hearing. Consumers can purchase online or over the phone and get personalized and convenient consultation and support from licensed hearing professionals via phone, text, email or video chat. The Eargo solution is offered to consumers at approximately half the cost of competing hearing aids purchased through traditional channels in the United States.
The company's 4th generation product, the Eargo Neo HiFi, was launched in January and features improved capabilities across audio fidelity and bandwidth. The Eargo Neo HiFi is available for purchase here.