Oura Reaches $11 Billion Valuation: How Far Can a Single Product Take a Company?
Source: Startup Insider – Original Episode (episode in German)
$875 million in a Series E round—and an $11 billion valuation for a fitness ring. Björn Rieckhoff and Jan Thomas analyze the Oura round: How is this valuation justified with just $1 billion in revenue? Why the platform risk posed by Apple remains the biggest strategic question mark. And whether Oura can make the leap from a single-product company to a sleep economy platform—or whether Fitbit flashbacks are justified.
Key themes in this episode
- Series E and Valuation Dynamics: $875 million in equity plus $250 million in debt—and a doubling of the valuation within a year. What’s behind this?
- Hardware Plus Subscription: Oura’s business model between ring sales and membership revenue—and why 20 percent software revenue is remarkable for a hardware company.
- Apple Platform Risk: Why dependence on Apple Health and a potential Apple Ring pose the greatest strategic risk.
- Sleep Economy: Experts estimate the market at over $100 billion—and Oura could become the brand people associate with sleep.
- Fitbit Flashbacks: Went public in 2015 for $14 billion, acquired by Google in 2021 for $2 billion. What wearable investors should learn from the Fitbit cycle.
- Exit Scenarios: IPO, Apple acquisition, or staying private—which path is realistic with an $11 billion valuation?
Transcript
This transcript has been edited for readability. The content and statements have not been changed. The original conversation was in German; this is an English translation.
Jan Thomas: Björn, hi, nice to meet you. Recharged?
Björn Rieckhoff: Recharged, yeah, slowly getting back to it.
Jan Thomas: Yeah, we actually talked about it a bit beforehand, and it fits today’s topic as well. Maybe this is just a little teaser, but you ran a marathon—in what I believe was the hottest marathon in Berlin since records began.
Björn Rieckhoff: Yeah, that was fantastic timing for my first marathon. To start off with a real battle against the heat. As I just said, it really is a humbling experience. I got through it very well, and I’m satisfied. Everything went very smoothly for me. But when you see runners dropping out left and right starting around kilometer 18, with their faces bright red, and the medical teams constantly busy—it does make you think a bit.
Jan Thomas: You just mentioned there were a lot of celebrities. Toni Kroos was there, and Harry Styles, and people like that. But there are also a lot of people from the startup scene running. We don’t want to name names, but it’s definitely a thing. I mean, there’s something about taking on that challenge yourself—it’s really something.
Björn Rieckhoff: That’s true. It’s becoming more and more attractive, and you can see that in the growth of the Berlin Marathon and the half-marathon too. As an average person, you can only get a spot at the starting line through a lottery these days. It’s just reaching a wider and wider audience across the general population. This fitness awareness, health awareness. And speaking of Toni Kroos, his brother Felix ran in it too.
Jan Thomas: Oh, I actually thought it was him.
Björn Rieckhoff: I just want to say here that I was half an hour faster than a professional soccer player. Even though I didn’t run a record-breaking time with my four hours, I’m still somehow very satisfied.
Jan Thomas: Yeah, that’s still intense. But I can also tell it’s probably not the last one for you, right?
Björn Rieckhoff: Don’t tell my wife that. You invest a lot of time in preparation, and you really have to figure out where to squeeze it in. And that naturally includes running early in the morning or late at night. And it really cuts into the time you’d normally spend with friends and family. But sure, I’ve run a half-marathon before, and it feels great to be carried along by the crowd—it really makes you want more.
Jan Thomas: It’s addictive. There are people who’ve been running it every year for decades. But you just used that as a bridge to today’s topic. You just mentioned wanting to stay fit and all that. And yesterday, when that news broke, I was actually surprised by the round we’re discussing now. I mean, in terms of scale and timing—I have to say, I wasn’t expecting that yet.
Björn Rieckhoff: No, absolutely not. Today we’re talking a bit about Oura, the fitness ring. They actually haven’t quite announced a Series E funding round yet. Apparently, a funding round is currently underway in the amount of $875 million. According to reports, it could even exceed $900 million, at a valuation of $11 billion. So we’re entering the decacorn league here. And you mentioned the timing. At the end of 2024, the valuation was only half as high, and now, just under a year later, it’s skyrocketing. That’s incredible momentum. And especially when you consider that there’s also $250 million in debt financing coming in through a consortium of various banks like JP Morgan Chase, Goldman, Bank of America, and so on—that’s a huge number.
Jan Thomas: That’s crazy. The last round was 200 million—just for comparison. And even then, I was wondering, why do they suddenly need so much more money now? I mean, there must be some strategic aspect to it. You just mentioned debt financing—do you think they need to pre-finance that much?
Björn Rieckhoff: I don’t know. It’s certainly an issue, being a hardware startup. It’s a combination of hardware sales paired with subscription services. So it has a significant software component, but the means to the end is really this ring. And of course, it doesn’t just need to be developed and produced—the logistics behind it have to be right, too. And above all, it has to be marketed. And all of that is significantly more capital-intensive than is the case with some software startups. In that sense, you certainly need a certain amount of financing here. To be honest, I almost expected that at a certain point you could rely even more heavily on debt financing. So this split of 900 million in equity and 250 million in debt—it’s a very, very large equity portion, you have to say.
Jan Thomas: I was just talking to Mathias Ockenfels about Revolut; they also did a round like that, and there were a lot of secondary investors involved. They basically made sure that long-term employees got liquidity. I think you always have to keep an eye on maintaining morale within the team. Maybe it’s the same here, with a few secondary investors included.
Björn Rieckhoff: I think so. And above all, we’ve reached a point where Oura is now 10 years old—I believe they launched in 2015. And that brings us to a stage where the first VC funds are starting to feel pressure to liquidate their positions, and employees are being bought out. I’m not sure how much of that actually flows in and how much is actually new capital. I don’t think the reports make that distinction very clearly. But given the volume of the transaction, it’s safe to assume that a significant amount of money is available for further growth and expansion of the business model.
Jan Thomas: I think Oura as a brand—I don’t know how you see it—but I think it’s great. They have such a clear mission, originally focused on sleep tracking, but now they’re expanding a bit more into menstrual cycles and things like that. So there are a whole range of areas they’re venturing into. But it still comes down to that ring. And now I’m wondering: Will it stay that way? Is that a good thing, or will they eventually have to start building out a whole product family? You could compare it to Peloton, which ended up making several devices.
Björn Rieckhoff: And honestly, I think Peloton got a little carried away there. The market is now looking at Peloton with a relatively critical eye. You can see that too if you follow the stock price. I actually think that with Oura, it’s more of a virtue to tailor a single product to, so to speak, passive users. What I mean by that isn’t necessarily that Oura users don’t exercise. They’re definitely very fitness-oriented people. But with Oura, the focus has always been on tracking fitness and sleep data, and not necessarily on recording activity data and activity profiles. That was more in the realm of Garmin’s positioning, which was stronger with GPS tracking and also offered more functionality with the watches and the chest strap or Whoop or the like. Oura has actually always appealed to users who were very much focused on health data per se—that is, resting heart rate, heart rate variability, sleep cycles, and so on. And I think they’re building on that, which is why we’re seeing expansion into women’s health. That fits in very well. I believe they’ve simply found a very deep and credible positioning in the market to build upon.
Jan Thomas: But at the same time, the competitive pressure is very high. I mean, Samsung has released a ring of some sort. You just mentioned Garmin and things like that. But I think especially Apple, who have said that the AirPods are actually supposed to become a kind of health device. That’s a whole range of features, and above all, the Apple Watch. And I’m not entirely sure where that leaves room for Oura, because I just don’t know if a single-product company can compete against a giant like Apple. That’s pretty difficult.
Björn Rieckhoff: I think that’s always been the investor argument with so many wearable companies in the past. I remember it myself from discussions we had at the fund. What does the outlook look like? How can you liquidate the whole thing again? Who buys something like this at the end of the day? And I think what Oura is doing is really exciting. It’s platform-independent. You can use it with both the iOS and Android ecosystems, which massively increases the user base. And because of its positioning as a sleep tracker, it’s very versatile. So I think there’s a certain coexistence between the clearly activity-focused brands like Whoop or Garmin, which primarily track athletic activities and can likely track high-intensity phases better than the Ring—the watch’s form factor is simply better for that. I don’t necessarily see a conflict there. But what I do see is a major player like Apple. The fact that, in a pinch, it’s strategically much better positioned than Oura—or, in other words, holds the upper hand. Simply by piggybacking on an existing platform, you create a dependency, and any strategic changes regarding how Apple Health and the data are handled have a massive impact on Oura’s business model. And that shouldn’t be underestimated.
Jan Thomas: Yeah, because I think they have to figure it out somehow. I believe I read that they’ve sold five and a half million devices. But I said that they’ve actually already addressed the market pretty well. The marketing campaigns and, more generally, how they try to reach users through email campaigns and things like that—they’ve actually perfected all of that already. So I’m wondering, how can they now, in principle, meet investors’ expectations? Will they quintuple revenue or something like that over the next two years? That’s not entirely clear to me.
Björn Rieckhoff: And to be honest, I’m a bit skeptical about that too. What I find impressive—hats off to them—is $500 million in revenue in 2024, which was already double what it was in 2023. In 2025, revenue is expected to hit the $1 billion mark, and for 2026, management is forecasting $1.5 billion in revenue. And that’s, of course, enormous—especially for a company that also has hardware sales. At some point, though, we’ll naturally reach market saturation. We certainly haven’t reached that point yet—the fitness affinity we discussed and the international expansion of the product. But of course, at some point we’ll reach a situation where you’re also reliant on existing users replacing their ring somehow and buying a new one, just as is regularly the case with iPhones.
Jan Thomas: That actually means pressure to innovate in the product as well.
Björn Rieckhoff: Exactly, there’s immense pressure to innovate with the product, and you can no longer rely solely on new customers for growth. And I don’t think Oura is quite there yet, but you’ll see that eventually. And then it’ll get interesting to see how things develop and how many people actually upgrade to the next product. So let me put it very pragmatically: I’m still using a Garmin Forerunner, which is probably the predecessor of the predecessor. But that’s absolutely enough for me, because I somehow get everything else through my own analyses using ChatGPT and the like. And I don’t necessarily need the Readiness Score that’s given to me. I just do that myself—I feed my sleep data into ChatGPT. For me, that doesn’t justify the high price of a new Garmin watch. And Oura will certainly have to address this issue at some point—what features will be added to justify an upgrade to the next product generation.
Jan Thomas: And I really can’t imagine what else is possible. I was already surprised back when the Ring came out by just how much you can measure from your finger. But I can’t imagine what else might be possible. Yeah, and that’s why I find Apple’s approach—saying they have the Watch, they have the AirPods, and maybe a ring at some point—actually much more promising. I mean, I’d almost bet on them starting to release a second product.
Björn Rieckhoff: I don’t know, it’s pretty hard to pinpoint something where I’d say, “That’s 100% complementary,” because, of course, you always end up with a bit of cannibalization between the different devices. So, if you’re wearing an Apple Watch now, would you also wear the Apple Ring? What added value does that give you, or is it more of a style factor, a lifestyle choice, or something like that? So it’s more emotionally driven than a truly pragmatic choice.
Jan Thomas: Unless it’s a control element for the glasses they’re building and stuff like that. That could be thought of in a more holistic way.
Björn Rieckhoff: That’s true. What I’d actually expect from Oura, setting aside the hardware for a moment: You now have a certain level of reimbursement eligibility in the U.S. It’s not FDA-approved and a medical device per se. But you have all these private health plans, which are essentially dominant in the U.S. and are subsidized by companies. Essentially, you already have employee benefit programs that Oura is targeting, and they’re gaining more and more partners through them. And that’s where you start to see this trajectory. You actually have a product that’s evolving from a lifestyle factor into a health device and is geared more toward the health market than necessarily the market for sports enthusiasts.
Jan Thomas: Maybe to recap, the positioning could also be—I remember back when we were putting together that magazine, *The 100*; we did a New York edition, and that’s where I met the team from Casper, that mattress startup at the time, which was pretty popular and basically a single-product company. And I said back then that sleep is actually such a super important topic. People spend so much more money on their cars—or whatever—than on the place where they actually recharge and spend 8 hours a day. And there’s a company in the U.S. called Eight Sleep that just raised 100 million. They make this AI-powered mattress, and I could easily imagine that Oura won’t just stay a ring, but might move into this whole sleep ecosystem where they say, “We’re the sleep company.” Because it’s such a market these days—with people being so health-conscious now—that there’s way more potential there than is currently being tapped.
Björn Rieckhoff: Yeah, absolutely. That’s a super-exciting perspective on it. And I also believe by now—given the scale of the funding round—that it’s absolutely within the realm of reality that Oura is driving a certain consolidation. So temperature-controlled sleep setups, water cooling systems that regulate the temperature so it’s ideal for you. In fact, it might even be split into two separate circuits, so you and your partner can have different temperatures in bed. I think that’s definitely the direction things are heading. Of course, we’re talking about first-world problems here—that needs to be made very clear. But that’s generally the point with Oura. Sleep simply plays an incredibly important role. It’s the biggest lever. Especially when you’re going through these intense training phases: if your sleep is on point, you’ll handle it well. But if that’s not the case, you’ll notice just how much of an impact it has.
Jan Thomas: Just for a lot of things, I think. I mean, optimizing your sleep—whether you want to lose weight or just want to concentrate better. Sleep is really such a completely underestimated and probably still neglected opportunity for many people to become healthier. I don’t know about mattresses—Casper kind of hit a wall, after all. I think there just wasn’t enough margin in that model. But I could definitely see them doing something along those lines.
Björn Rieckhoff: I think your biggest advantage at Oura is that with Casper and the other startups, you had this huge logistics issue. At Peloton, too, by the way, given the bulky goods. It’s a bit different at Oura. Right now, you’re just shipping the ring. That could change in the future. But if you keep it that simple, there’s already a whole lot there. Experts are already talking about the “sleep economy” and estimate the value of this industry at over 100 billion US dollars annually. That’s already on the market.
Jan Thomas: And tell me, the company you associate with sleep—I can’t really think of one off the top of my head. I mean, if you say “sleep,” VW, the car.
Björn Rieckhoff: Yeah, exactly. It doesn’t really exist like that. There’s definitely an opening for positioning there. You’ve seen a few attempts here and there from some startups that have tried it. Meditation—I’m thinking of Calm or something like that—which also leaned heavily toward helping people fall asleep. But not holistically. And honestly, when you think about what an Apple Watch or something like that shows you, it’s just a bit of the Apple principle—making it very user-friendly and drilling down to the most relevant points. Those are just averages. That’s not necessarily suited for the analytics enthusiast. So there’s definitely room for improvement there.
Jan Thomas: I’m currently on the Eight Sleep website. So, for any listeners who want to jump on this, there’s a 150-euro discount on the Pod 5 Ultra right now—it’s only 5,500 euros.
Björn Rieckhoff: That was my first-world problem.
Jan Thomas: No, but what I mean is, that shows a bit of the imagination behind it. I mean, if you say the product isn’t the Ring anymore, but it’s sleep—I can actually picture that. That’s also pretty good positioning compared to Apple. And we’ve seen it here in Germany with Emma mattresses and such, which I believe were sold for a billion-euro exit. So, you can make money with mattresses. And then, if you scale something like this up, it might justify the valuation again, because otherwise I don’t understand it. I don’t understand how, with a billion in revenue—as respectable as that is—and 50 percent annual growth, likely with a good portion of software margins, I just don’t get the 11 billion.
Björn Rieckhoff: Basically, in communications with investors—that is, during the roadshow—they must have provided significantly more insight than is currently the case with the rumor release. Maybe we’ll learn a lot more over the next week or two about what management has planned. Interestingly, on that note, the management team has IPO experience. So there’s actually some substance behind it. But yes, I’ve read that Oura generates 20 percent of its revenue from membership subscriptions. That’s not insignificant, but it’s not the bulk of the revenue either. Hardware sales will likely level off or reach saturation at some point—quite naturally.
Jan Thomas: And they also—we’ve talked about this before—brought in some really big names during the angel round back then or the seed round. Will Smith is on board, then I somehow spotted Lance Armstrong, Mark Benioff—so there are definitely people there who I think can open doors in all sorts of directions. And also on board—which is interesting, by the way—is Nico Wittenborn, who I believe used to be at Point Nine, if I remember correctly. So it’s exciting that he’s involved in a project like this.
Björn Rieckhoff: That sounds very lucrative, yes, but it also fits very well with their focus, and they only deal with consumer topics.
Jan Thomas: Well, I find it exciting; I find this lineup exciting. I didn’t really expect this. We’ve just been speculating a bit about what the background might be, because otherwise it doesn’t make sense to me. That they’re now growing massively with this one product—I don’t know.
Björn Rieckhoff: Yeah, there must be more to it than that. Or maybe it also suggests that we’re finally seeing a breakthrough in valuations in Europe. That could be the case, too. In any case, I think it’s a very strong signal for wearables in general and for the European ecosystem—that has to be said. It’s a Finnish company.
Jan Thomas: Totally. Yeah, but still, maybe if they were to go public with those numbers now—I mean, the IPO window is slowly opening up again. But with an 11 billion valuation and a billion in revenue, you don’t go public, do you?
Björn Rieckhoff: No, I’d still need a bit more—things probably need to align better. If anything, you’ll need 2026 to demonstrate that 50 percent growth again and, if necessary, confirm that you’re actually on the verge of profitability or just barely profitable, despite the very strong growth. I think that would make for a compelling investor story if you combine that with the corresponding expansion potential in the American, Latin American, and Asian markets. But yeah, I’m getting a bit of a Fitbit flashback. For listeners who might not remember, Fitbit went public in 2015. Right after the IPO, the share price rose to $49 per share, and they were later sold for two billion, which worked out to just under $7.
Jan Thomas: But that means they were once worth 14 billion.
Björn Rieckhoff: Yes, apparently. So that’s the thing. I think the wearables market goes through certain cycles. And I also think Oura has done a very, very good job, especially in the consumer sector, of taking the right steps. They’ve had partnerships with Gucci and others in the past. So it’s really become a lifestyle product and a brand that users strongly identify with, and that naturally contributes to that kind of valuation.
Jan Thomas: But companies like that aren’t really in the running as buyers—I mean, if you’re thinking about the luxury brand segment and stuff like that, like LVMH. It might still be possible that they’d try something like that, because a company like Adidas or something—it’s all too big already, so Oura is already too far gone.
Björn Rieckhoff: Yeah, and at some point, that’s the step where you kind of price yourself out of the market. So either you make the leap to the public market or you stay in the private markets for ages—which has certainly been a viable path in recent years if you can somehow provide existing investors with a certain level of liquidity. But I see that the exit market gets significantly tighter the bigger you get. And honestly, whether that’s a fashion brand or a luxury goods company taking over, I don’t know. I’d rather assume they’ll try to stick with the tech track. And yes, Fitbit was later bought by Google. Google probably won’t do it now—I don’t think so, but...
Jan Thomas: But Apple is definitely a candidate, right? Really?
Björn Rieckhoff: They’ve got endless cash, you have to admit.
Jan Thomas: They don’t know what to do with it. If they were to actually—I mean, Apple has this HomePod, which I always thought would become the operating system for the home. And if Oura were to target the bedroom, that might be a first step for Apple that makes sense, because I don’t think Apple has a presence there at all.
Björn Rieckhoff: You’re absolutely right, and honestly, I think in terms of brand messaging, the intersection, the target audience, and all that, it fits in pretty well. There’s room to get creative there.
Jan Thomas: Let’s put it on the back burner, I’d say. There’s definitely going to be more news coming up soon, and then we’ll talk about it again.
Björn Rieckhoff: Sounds good.
Jan Thomas: Perfect. That was a lot of fun. Now go ahead and recover from your marathon, and I’m curious to see when you’ll run next.
Björn Rieckhoff: Yeah, thanks. I’ll keep you posted. Thanks a lot.
Jan Thomas: See you later, then? Ciao.
About Björn Rieckhoff
Björn Rieckhoff is an independent advisor and business angel with nearly ten years of experience in early-stage venture capital. He helped build Cavalry Ventures as its first employee and later became a partner of the fund. Today he supports founders more directly with fundraising — sharpening their story, stress-testing business models, and setting up lean financing processes. With over 80 transactions and board seats from seed to Series B, he brings this perspective as a sparring partner for entrepreneurs.
About Startup Insider
Startup Insider is the industry portal for the startup scene in the DACH region. It covers news from all regions and industries, along with an overview of key players and events in the German-speaking startup world.