Musely secures $360 million non-dilutive capital from General Catalyst to fuel growth

Musely, a direct-to-consumer telemedicine platform specialising in compounded treatments for skin, hair, and menopause care, has secured over $360 million in non-dilutive capital from General Catalyst's Customer Value Fund (CVF). The funding, structured as a revenue-share agreement rather than an equity sale or interest-bearing loan, will be used to accelerate customer acquisition, sales, and marketing efforts.

General Catalyst's CVF operates with its own distinct limited partners, and the capital deployed was not included in the firm's recent $8 billion fundraise. This financing vehicle targets companies with predictable revenue streams, allowing them to borrow capital and repay the funds along with a fixed, capped percentage of revenue generated from the use of the fund.

CEO Jack Jia noted that the company has remained cash flow positive since 2019 and has not raised equity capital since its initial 2014 funding. Jia explained that while traditional venture capitalists frequently approached him about a potential round, he consistently turned them down to avoid reducing his ownership in the company. He found the CVF terms far less costly than a dilutive equity round and more favourable than a standard bank loan.

The funds are designated to super-charge customer acquisition, addressing the high cost of acquiring new customers for direct-to-consumer brands as they scale towards billion-dollar revenue milestones. Jia highlighted that when a company becomes a billion-dollar revenue entity, it typically needs another billion to grow to the next level, a challenge this funding aims to solve.

Musely joins an existing CVF portfolio that includes Grammarly, Lemonade, and Ro. The company allows patients to access prescription products through asynchronous consultations with board-certified dermatologists and OB-GYNs, having pivoted from a wellness community to prescription skincare in 2019.