1Mby1M Incubation Radar 2018: WellWrap, Danville, CA

Joint pain is an ailment that has been around from time immemorial and given the growing overweight population, it can be expected to be a challenge in the future as well. WellWrap is a wearable orthopedic wrap embedded with proven NASA Low Level Laser technology (LLLT) for treating musculoskeletal joint pain without any pain killers. It also helps capture data on patients’ pain levels and vitals so that loved ones and doctors can track their recovery.

Founder CEO Abi Kariguiddaiah was earlier the co-founder of another LLLT company called Theradome and had contributed to bringing its product to market. He has over 15 years’ experience in product management and business development in data management, mobile, and software solutions.

Abi was deeply distressed when his parents suffered from knee pain. He also resolved to do his bit to address the opioid crisis. He got in touch with Ron Clough, an experienced CEO of a medical device company that had a successful exit. Ron agreed to act as an advisor on the business development fronts and thus WellWrap took off.

LLLT has been around for a while and FDA has approved several LLLT devices. Initially, the devices were large scale but since 2000s, hand-held devices were the trend. Currently, wearable on-the-go devices for home use are in vogue.

WellWrap does not claim to reinvent the technology, rather it focuses on utilizing it in a new patent-pending form factor that makes it efficient in bringing the clinic to the home. It aims to make it easy to treat pain immediately at home without reaching for pain killers. WellWrap is FDA registered and safe for home use. It is also pursuing additional clearances.

There are many segments of competitors such as braces (Breg, Ossur, etc.), TENS pain devices (LG-Tech Elite, Quell Relief), wellness supplements, and snake-oil solutions. More recently, laser/LED devices have come up that include hand held devices like the B-cure, Tendlite, & LaserTouchOne, and wearable devices such as The DPL therapy system and Willow curve joint pain relief. Many wearable products use just LEDs which do not have penetration power as they are non-coherent beams.

WellWrap embeds proven NASA science using LLLT to stimulate cellular ATP production which reduces inflammation and pain and accelerates recovery. WellWrap treats musculoskeletal joint pain for the knee, elbow, back, shoulders/neck, etc. caused by injury, surgery or illnesses such as Arthritis and Osteoporosis, Carpal Tunnel, Plantar Fasciitis, etc. and is an alternative to pain killers.

WellWrap’s mobile app enables consumers to configure their pain treatment, track their progress, and measure pain relief while sharing information with caregivers. WellWrap is an ideal orthopedic solution for athletes/teams, post-operative patients, and chronic pain sufferers seeking better outcomes than what is available through conventional pain medications alone, which in turn can lead to opioid addictions, overdoses, and death.

WellWrap’s first product Knee Wrap is being marketed through two approaches: Direct to Consumer through Retail or Over-The Counter (OTC) channel and the B2B approach through healthcare providers.

For OTC device sales, WellWrap expects the TAM to be $1.2 billion for the US market. It assumes that one-third of all Americans report experiencing knee pain at some point in time and try several approaches to relieve pain. 15%-20% of men and 20% of women or 54 million people are afflicted with knee pain according to CDC. Osteoarthritis is the most common cause of knee pain in people 50 years or older. Assuming 40% or 40 million of the 100 million working population can afford its solution at a price of $299 and assuming 10% of them or 4 million have knee pain or know somebody they would buy it for, the TAM would be $1.2 billion.

For TAM calculation for the US market using the B2B approach, WellWrap considered several markets and products including wraps for the wrist, back, foot, elbow, and neck. There were 240,000 practicing (employed) physical therapists in the US in 2016 and about 109,000 business focused on physical therapist services across the US. There were 47,000 practicing (employed) chiropractors in the US in 2016 and approximately 2,500 new chiropractors enter the workforce every year. So, there are about 156,000 target businesses and assuming WellWrap sells to 10% or 15,000 businesses and sells two units per month or 120 over 5 years, TAM for the B2B segment for knee wraps in US would be 15000 x 120 x $299 approximately $540 Million over five years. Similarly, Wellwrap has estimated the TAM for the B2B segment for the US market for Wrist Wrap to be $500 million, Back Wrap to be $3.1 billion, Foot Wrap to be $1 billion, Neck Wrap to be $400 million, and Elbow Wrap to be $200 million. The total TAM for the B2B segment is thus estimated to be $5.7 billion.

The total TAM for knee wraps for the US market would be $1.74 billion.

Currently, WellWrap is focused on consumers. Through early validations, including some split tests on Facebook, it has identified the target segments as older people with osteoporosis/arthritis/chronic pain, injuries and pain among sports/weekend warriors, and overweight people with knee pain (with or without dependence on opioids).

WellWrap is at the pre-production stage and has been to validate the product and concept through Sports clubs, physical therapists, and chiropractors. Once the company is capable of low-cost manufacturing and has 100-1000 units to offer, it will be more focused on physical therapist/chiropractor and other B2B channels since each therapist can potentially purchase 5-10 units.

WellWrap is well on its way to work with two separate manufacturers, one for the wrap itself and another for the electronics to protect the intellectual property. It anticipates low COGS per product and high gross profit margins of upto 80%. It also plans to work with a distributor for the B2B market and have a high-end version called “Wellwrap PRO”.

WellWrap is bootstrapped for the most part. It has raised $100K in convertible notes debt financing from three investors and Abi has invested his personal savings of $50K.

WellWrap’s strategy is to initially get market validation through PT and Chiro offices. It has established relationships with a set of early partners who are willing to test the product. The company is looking for pre-seed financing to manufacture units to support the testing.

This segment is a part in the series : 1Mby1M Incubation Radar 2018