The funding round also saw participation of existing investors that include NEA, the Charles and Helen Schwab Foundation, and Nan Fung Life Sciences
US-based hearing aid manufacturer Eargo has closed a $71m equity financing, led by new co-investors Gilde Healthcare and Longitude Capital.
Existing investors including New Enterprise Associates (NEA), the Charles and Helen Schwab Foundation, and Nan Fung Life Sciences also participated in the funding round.
As part of the transaction, Gilde Healthcare general partner Geoff Pardo and Longitude Capital founder and managing director Juliet Tammenoms Bakker will be appointed as directors in Eargo Board.
Eargo is a medical device company focused on developing hearing aid solutions and enables consumers to buy its products online and get personalised consultation and support from licensed hearing professionals through phone, text, email or video chat.
Eargo president and CEO Christian Gormsen 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.”
Eargo will expand and commercialise its direct-to-consumer hearing loss solution
Eargo said that the new financing will support its plans to expand the commercialisation of its direct-to-consumer hearing loss solution.
The company said that it offers FDA regulated, virtually invisible, rechargeable, completely-in-canal exempt Class I hearing aid, online hearing screening and telecare consultation and support to enable customers purchase an advanced hearing solution from their homes
A survey conducted by The Hearing Review in May 2020 showed that around 75% of audiology clinics in the US and Canada were open for patient visits, however, most of the clinics are receiving 50% less than average revenue they received before Covid-19 outbreak.
The company claimed that unlike traditional distribution channels, it has seen revenue growth in 2020, with year-over-year growth accelerating in both first quarter 2020 and second quarter 2020.
Geoff Pardo 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.”