Utrecht (The Netherlands) and Boston (Massachusetts, US) – Eargo Inc. (San Jose, CA), 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, co-led by new 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 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.”
Eargo is a medical device company dedicated to improving the quality of life of people with hearing loss. The innovative product and go-to-market approach address the major challenges of traditional hearing aid adoption, including social stigma, accessibility, and cost. 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. The 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. For more information, visit the company’s website at www.eargo.com.
About Gilde Healthcare
Gilde Healthcare is a specialized healthcare investor managing over €1.4 billion ($1.5 billion) across two fund strategies: venture & growth capital and private equity. Gilde Healthcare’s venture & growth capital fund invests in fast growing companies active in digital health, medtech and therapeutics. The venture & growth companies are based in Europe and North America. Gilde Healthcare’s private equity fund invests in profitable European lower mid-market healthcare companies with a focus on the Benelux and DACH region. The private equity fund targets healthcare providers, suppliers of medical products and service providers in the healthcare market. For more information, visit the company’s website at www.gildehealthcare.com.