A few unfiltered thoughts on Flo, the $1 billion period-tracking app

The hottest news in digital health this week? Of all things, a period and pregnancy tracking app.

Flo announced a $1 billion valuation on Tuesday, creating an uproar across our industry and plenty of commentary from insiders. The company also said it raised $200 million to fuel its growth efforts, led by the growth equity investment firm General Atlantic.

The news is important for a few reasons: It’s one of the few companies in women’s health that has made it to the growth stages in tact (Maven Clinic is the other that is perceived by investors as a big success story). And the market has been down in the past few years, meaning we’re all starved for news on big rounds. Given this high valuation, is this a signal that activity is starting to pick back up?

I talked to a bunch of investors yesterday about the round to help me get perspective. Amidst the chatter, I also saw a few important questions pop up repeatedly - so I figured it would be valuable to address those head on:

1. Why are there two men at the helm of this women’s health company and what does that mean for the industry?

   The Flo co-founders are Dmitry and Yuri Gurski, brothers who hail from Belarus. But it’s worth pointing out that the business is far from devoid of powerful women. An early proponent of the app is the Russian model Natalie Vodianova, who invested in Flo and took a board seat (this is a valuable example of how powerful celebrities can be for consumer tech). Not to mention, all the female employees that made this app successful - I’d argue that we too often fixate only on the founders. That said, I do think this is a very legitimate point and worthy of further discussion.

2. Why is this company worth so much? Does it mean that the market frothy again?

   I’d say this is actually a round that appears to be fairly conservative for what we’re seeing in the market today.

3. Why are so many people using this period tracking app? I thought the space was flooded with competitors?

   Flo and Clue are amongst the most popular apps for this use-case. Stardust is also rising star, especially with Gen Z. I’m truly not surprised there’s some standouts in the category for the simple reason that I’m a person who menstruates, and this kind of information is highly valuable. I’m also not surprised that male-led VC firms missed this opportunity hiding in plain sight.

So with that in mind, let’s dive into some analysis on why Flo’s valuation is actually right in the range of what we’re seeing in the market today. For that reason, I don’t think it signals that the market is frothy again, although it does confirm that firms still have plenty of dry powder to deploy.

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