Medical Device Maker Eargo, Receives $25 Million In Series B Financing For Hearing Aid
The announcement comes just a few months after the company – founded in 2010 – raised $13.6 million in Series A funding in June of this year.
December 14, 2015 | by Sarah Massey, M.Sc.
Hearing loss product manufacturer Eargo, is set to receive $25 million in Series B capital from medical device veteran, New Enterprise Associates (NEA). The announcement comes just a few months after the company – founded in 2010 – raised $13.6 million in Series A funding in June of this year.
Insiders in the medical device industry have touted the difficulties manufacturers face in getting hearing aids to the market. In contrast to some other medical device categories, hearing aids are often considered to be not effective enough for the price.
In the US, many payers do not cover the cost of hearing aids, nor does the Medicare system reimburse senior patients for these devices. In light of these difficulties, sales of hearing aids do not reflect the number of patients who could benefit from them.
“Eargo is one of the most innovative and fastest-growing consumer medical device manufacturers in Silicon Valley, and its groundbreaking technology is changing the way people think about hearing loss,” said Dr. Josh Makower, an NEA General Partner. “Because Eargo is at the intersection of consumer technology and healthcare, and is poised to disrupt the traditional hearing aid industry, it is the perfect brand to add to our consumer Healthtech portfolio.”
Eargo’s products are designed to help individuals with mild to moderate hearing loss, and are sold in a pair – one for each ear. The company is looking to undercut its competitors by pricing the hearing aids at $1,980 – less than half the cost of similar devices.
The company will also offer a monthly payment plan for as little as $96 per month for the pair, along with a charging base and a portable charging device. Nearly 50 million people in the US alone experience some degree of hearing loss beginning as early as their 30s – the company’s target market.
Since the devices are inserted deep into the ear canal, the company calls them ‘invisible’ in-ear hearing devices. The hearing aids are suspended within the ear canal by the company’s Flexi Fibers technology, which is soft and flexible so as to allow low bass sounds to penetrate the ear.
The Eargo device is designed to specifically amplify middle and higher tone treble sounds. As of today, it’s unclear whether Eargo has applied for US Food and Drug Administration (FDA) approval for its medical device, as no public records regarding the company’s regulatory strategy exist.
“Since the launch of our new hearing device earlier this year, we have seen an incredible level of consumer demand and ultimately have been experiencing tremendous growth as a company,” said Rapheal Michel, Eargo co-founder and CEO. “Together we are strongly positioned to bring innovation in hearing health to the millions who may need a boost but who have remained on the sidelines until now due to cost or stigma.”
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Keywords: Medical Device, FDA, Payer
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