Tag: sextech

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Looks like sex tech startup Lora DiCarlo is done for

Lora DiCarlo, a sex tech startup that made headlines in 2019 after being blacklisted from the Consumer Electronics Show, seems to have shut down. The company’s website is offline and reportedly orders have gone unfulfilled for months.

TechCrunch has reached out to the eponymous founder for confirmation, but it sure looks like the end of the line for a briefly promising high-tech sex toy enterprise.

Founded in 2017, Lora DiCarlo was one of a new wave of tech-forward sexual health companies headed up by women. It won an innovation award at CES 2019 for, as our writer put it at the time, “a hands-free device that uses biomimicry and robotics to help women achieve a blended orgasm by simultaneously stimulating the G-spot and the clitoris.”

But then the Consumer Technology Association, which runs CES, withdrew the award and banned the company from exhibiting at the show. Their explanation at the time was that neither the company nor its devices “fit a product category.”

Predictably, this attracted immediate blowback and allegations of sexism, prudery and generally bad judgment. Everyone was on Lora DiCarlo’s side, and the publicity was invaluable, she later told TechCrunch at Disrupt: “I think they actually did us a pretty big favor.” The company raised $2 million around that time, and about $9 million total over its five years of operation.

But despite a big return to the show in 2020 (and a coveted TC+ feature, of course), the company seems to have faltered during the pandemic — perhaps falling victim to the same chip shortages and manufacturing problems even established hardware makers encountered.

A sex tech startup’s triumphant return to CES

As chronicled by Women’s Health, the last few months seem to have been Lora DiCarlo’s last, as various aspects of a functioning commercial enterprise began to fail: orders weren’t going out, stock was gone at retail partners and personnel have left. The site went down earlier this month and is down still. Although there has not been any official announcement, it certainly does seem that the company is kaput.

It’s too bad, but finding success as a hardware startup is hard enough without a pandemic and the stigma on sex toys adding drag. We’ll update this article if we hear back from DiCarlo.

Looks like sex tech startup Lora DiCarlo is done for by Devin Coldewey originally published on TechCrunch

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Cannabis, sex tech and psychedelics startups deserve more than stigma

Welcome to The TechCrunch Exchange, a weekly startups-and-markets newsletter. It’s inspired by the daily TechCrunch+ column where it gets its name. Want it in your inbox every Saturday? Sign up here.

Cannabis, sex tech and psychedelics are often lumped together under the “vice” category — a characterization that prevents many VCs from investing in these spaces. But does that make sense? Let’s explore. — Anna

It’s (not) a sin

Isn’t cannabis actually similar to coffee, wine and spirits? That’s the argument Emily Paxhia made on a Twitter Space hosted by TechCrunch+ earlier this week to discuss our latest U.S. cannabis investor survey.

Despite regulatory hurdles, these 4 US cannabis investors are planting seeds for tomorrow

A managing director at cannabis-focused hedge fund Poseidon Asset Management, Paxhia argued that marijuana-derived products have a lot more to do with wellness than with the “sin” category they often fall under.

“Sin clause” and “vice clause” are terms that venture capitalists use to refer to their inability to invest in certain business categories, from porn and gambling to alcohol and tobacco. When I explored fundraising strategies for sex tech startups earlier this year, I found out that this veto typically comes from the fund’s limited partners, or LPs.

It is understandable why investors wouldn’t want to put their money in certain types of businesses, let alone be known for doing so. But there’s a fine line between moral stances and stigma.

“I don’t identify with the word ‘vice’ at all,” Andrea Barrica told me. Barrica is the founder of O.School, which she describes as a media platform for sexual wellness. “Wellness” is a popular term in both the sex tech and cannabis industries — because it makes them more palatable, sure, but also because it truly reflects the impact that entrepreneurs are hoping to have.

It is worth keeping in mind that cannabis isn’t just about providing a recreational high. In Europe, we heard from investors, it is medical cannabis that has most of the momentum. It is the perspective of health benefits that drives many entrepreneurs, who deserve better than cheap laughs.

Similarly, a deep dive into psychedelics taught me that this is about much more than drugs and fun. With investors sometimes getting into this space after personal journeys with depression or burnout, and founders hoping to make a dent on the global mental health crisis, easy jokes quickly feel out of place.

Psychedelics startups are on a long journey to consumer markets, but these 5 VCs are taking the ride

Missing out

The vice clause applies only to certain types of investors, which is also problematic. The fund that is handling your pension might pass on cannabis investments, but many family offices aren’t. This means that returns from these potentially lucrative bets will be concentrated in the hands of the already-wealthy.

Some fund managers are also investing as individuals, Paxhia said — and it’s them who will get the upside. Meanwhile, fiduciaries are missing out on the returns and the impact they could have, for arbitrary reasons. After all, what’s legal is not always moral, and vice versa.

The most glaring paradox is that the tobacco, nicotine and alcohol industries are actually keeping close tabs on cannabis and whether consumption might shift. Would the shift be a net negative for society? Perhaps not. As for psychedelics, there’s research ongoing to use nonhallucinogenic derivatives to treat opioid addiction. With overdose deaths involving fentanyl and methamphetamine surging in the U.S., is this vice? I don’t think so. Do you?

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Advice and strategy for early-stage sex tech startup founders

As of this month, personal care and beauty retailer Sephora is selling vibrators on its U.S. website. It is a significant milestone not just for Dame and Maude, the startups it partnered with, but also for the sexual wellness product category.

These startups operate in a different environment than the one founders encountered just a few years ago, but raising money is still no easy feat, a “paradoxical issue” to navigate, according to Andrea Barrica, CEO of sexual wellness education platform O.School. “When you go into a space where very few people have gone, with a lot of barriers, arguably you need more money, but typically we have to do it with less money upfront,” she told TechCrunch.

To understand how early-stage sex tech startups can address this challenge, we also spoke to founder Lora DiCarlo and investor Carli Sapir, founding partner at Amboy Street Ventures. As for Barrica, she now sits on both sides of the table – in addition to being an entrepreneur, she is angel investing and raising a fund.

Our conversations indicated that things are opening up: There are more funding sources to leverage, and convincing investors is easier than it used to be. But fundraising is still more difficult than in other verticals.

More than a few venture capital funds will never invest in sex tech due to “vice clauses” that contractually obligate them to pass on companies that offer products or services in categories like alcohol, tobacco, gambling, weapons, porn — and sexual wellness.

“The larger the fund, the more common it is” for it to have a vice clause, Barrica said, adding that the restriction is wide-ranging: “I’ve met small funds that have conservative LPs.”

To find out, she said, “You just have to ask the fund managers or partners: ‘We’re really excited about sexual wellness as a part of health and wellness. Is this going to be a problem with one of your LPs?'”

Asking a broad question about their concerns is a good idea, because even without a written clause, fund managers might not be keen on investments that could upset their limited partners. “We VC funds raise a new fund every three years or so, and they don’t want to lose any investors,” Sapir agreed.

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Tech startups want to destigmatize sex

Sex, despite being one of the most fundamental human experiences, is still one of those businesses that some advertisers reject, banks are hesitant to financially support and some investors don’t want to fund.

Given how sex is such a huge part of our lives, it’s no surprise founders are looking to capitalize on the space. But the idea of pleasure versus function, plus the stigma still associated with all-things sex, is at the root of the barriers some startup founders face.

Just last month, Samsung was forced to apologize to sextech startup Lioness after it wrongfully asked the company to take down its booth at an event it was co-hosting. Lioness is a smart vibrator that aims to improve orgasms through biofeedback data.

Sextech companies that relate to the ability to reproduce or, the ability to not reproduce, don’t always face the same problems when it comes to everything from social acceptance to advertising to raising venture funding. It seems to come down to the distinction between pleasure and function, stigma and the patriarchy. 

This is where the trajectories for sextech startups can diverge. Some startups have raised hundreds of millions from traditional investors in Silicon Valley while others have struggled to raise any funding at all. As one startup founder tells me, “Sand Hill Road was a big no.”

A market worth billions or trillions?

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Sextech company scorned by CES scores $2M and an apology

Lora DiCarlo, a startup coupling robotics and sexual health, has $2 million to shove in the Consumer Electronics Show’s face.

The same day the company was set to announce their fundraise, The Consumer Technology Association, the event producer behind CES, decided to re-award the Bend, Oregon-based Lora DiCarlo with the innovation award it had revoked from the company ahead of this year’s big event.

“We appreciate this gesture from the CTA, who have taken an important step in the right direction to remove the stigma and embarrassment around female sexuality,” Lora DiCarlo founder and chief executive officer Lora Haddock (pictured) told TechCrunch. “We hope we can continue to be a catalyst for meaningful changes that makes CES and the consumer tech industry inclusive for all.”

In January, the CTA nullified the award it had granted the business, which is building a hands-free device that uses biomimicry and robotics to help people achieve a blended orgasm by simultaneously stimulating the G spot and the clitoris. Called Osé, the device uses micro-robotic technology to mimic the sensation of a human mouth, tongue and fingers in order to produce a blended orgasm for people with vaginas.

Lora DiCarlo’s debut product, Osé, set to release this fall. The company says the device is currently undergoing changes and may look different upon release.

“CTA did not handle this award properly,” CTA senior vice president of marketing and communications Jean Foster said in a statement released today. “This prompted some important conversations internally and with external advisors and we look forward to taking these learnings to continue to improve the show.”

Lora DiCarlo had applied for the CES Innovation Award back in September. In early October, the CTA notified the company of its award. Fast-forward to October 31, 2018 and CES Projects senior manager Brandon Moffett informed the company they had been disqualified. The press storm that followed only boosted Lora DiCarlo’s reputation, put Haddock at the top of the speakers’ circuit and proved, once again, that sexuality is still taboo at CES and that the gadget show has failed to adapt to the times.

In its original letter to Lora DiCarlo, obtained by TechCrunch, the CTA called the startup’s product “immoral, obscene, indecent, profane or not in keeping with the CTA’s image” and that it did “not fit into any of [its] existing product categories and should not have been accepted” to the awards program. CTA later apologized for the mishap before ultimately re-awarding the prize.

At the request of the CTA, Haddock and her team have been working with the organization to create a more inclusive show and better incorporate both sextech companies and women’s health businesses.

“We were a catalyst to a huge, resounding amount of support from a very large community of people who have been quietly thinking this is something that needs to happen,” Haddock told TechCrunch. “For us, it was all about timing.”

Lora DiCarlo plans to use its infusion of funding, provided by new and existing investors led by the Oregon Opportunity Zone Limited Partnership, to hire ahead of the release of its first product. Pre-orders for the Osé, which will retail for $290, will open this summer with an expected official release this fall.

Haddock said four other devices are in the pipeline, one specifically for clitoral stimulation, another for clitoral and vaginal stimulation, one for anywhere on the body and the other, she said, is a different approach to the way people with vulvas masturbate.

“We are aiming for that hands-free, human experience,” Haddock said. “We wanted to make something really interesting and very different and beautiful.”

Next year, Haddock says they plan to integrate their products with virtual reality, a step that will require a larger boost of capital.

Haddock and her employees don’t plan to quiet down any time soon. With their newfound fame, the team will continue supporting the expanding sextech industry and gender equity within tech generally.

“We’ve realized our social mission is so important,” Haddock said. “Gender equality, at its source, is about sex. We absolutely demonize sex and sexuality … When you talk about removing sexual stigmas, you are also talking about removing gender stigmas and creating gender equity.”

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Unbound’s Polly Rodriguez talks about the future of sexuality

 Unbound is a self-described sextech webshop for rebellious women and its founder, Polly Rodriguez, is a unique and fascinating representative for the site. In this Technotopia podcast I talk to Rodriguez about the future of sex toys and why sex robots probably won’t win us over. It’s refreshing to hear someone like Rodriguez talk about the future of human-to-human content and what… Read More