Featured Founder: July 2022

Cabinet Health

Executive Summary:

• Cabinet Health sells over the counter (OTC) pharmaceutical products throughout the U.S. in categories like allergy relief and pain relief.

• Why we like Cabinet Health:

  • Cabinet Health has had over $10 million of sales for the past two years and we feel they have begun to find their “product-market fit”.

  • Our research has confirmed that “store-brand” (private-label) OTC pharmaceutical products are the most commonly purchased in the US and we see room for Cabinet Health to disrupt the market and uproot products like “store-brand” ibuprofen or allergy relief.

  • We believe this highly competent team of New Majority founders have the right experience and team of advisors to continue to scale the business as they expand sales. For a full description of their growth strategy read our full investment analysis below

  • This business has recently raised venture capital backing and so we feel confident that this mitigates financial risk (defined in-depth below) for investors who choose to invest in this round of equity crowdfunding

• Risk Summary:

  • The business is not profitable today because it has expenses which exceed its revenues. The main expenses are in logistics, sales, and marketing. Cabinet Health will need to manage the costs of its fulfillment centers and its third-party logistics if it wants to become profitable in the years ahead.

  • Cabinet Health has direct competition from companies like Genexa that sell to the same core audience.

Meet the Team

Cabinet Health’s team has a varied and applicable skill set for this industry including a 3rd generation pharmaceutical entrepreneur, three ex-Deloitte consultants, and a U.S. Army officer. Co-Founders Achal Patel and Russell Gong spent more than five years at Deloitte and led projects on healthcare strategy, supply chain, and social enterprises. Nalini Boodoosingh, Head of Business Development, has extensive experience launching and scaling consumer products. She was National Retail Sales Director with Harry’s, a health and beauty brand valued at $1.7 billion. Ex-Deloitte consultant, Tyler Martin, Head of Digital & Analytics, has experience in the healthcare industry, focusing on product development. And Carrie Rich, a board member, is a co-founder of The Global Good Fund and serves on multiple board committees, including the board of Trinity Health a $18B+ healthcare system.

Partners/Investors

• Valisure

• Grove Collaborative

• rePurpose

• techstars

• SoGal

What’s the Problem?

• The healthcare and pharmaceutical industry has created an “Unsustainable Cycle of Healthcare” where single-use plastics are discarded and end up in landfills and the ocean. Approximately 194 billion plastic bottles are produced by the pharmaceutical industry annually, with only 9% recycled. [Source: Cabinet Health via Republic]

• Cabinet Health aims to solve this problem through its sustainable packaging and supply chain. Cabinet Health uses a combination of reusable and fully compostable packaging for its OTC pharmaceutical products.

How do they make money?

• Cabinet Health sells 30+ products, including high-quality medicine across five core categories such as allergy, relief, cough and cold, digestive health, sleep relief pain relief via three main channels (with E-Commerce making up 75.89% of sales).

  • Cabinet Health’s products are sold online and through retailers like Amazon and Walmart in reusable bottles with sustainable packaging.

• Products are sourced from ethical manufacturers that have been audited by the FDA. Cabinet Health uses a manufacturing facility owned by the family of one of the co-founders (Achal Patel) which has been producing white-labeled pharmaceutical products for many years. [Source: Cabinet Health]

Financial Highlights

• Financial Summary [Source: Cabinet Health, Form C/A, via Republic]

  • 2020:

    • Revenue: $13,215,534

    • Net Loss: $(2,385,855)

  • 2021:

    • Revenue: $10,308,052

    • Net Loss: $(3,940,167)

• Round Dynamics: [Source: Republic]

  • Cabinet Health has raised $6.6M prior to this round of financing

    • $27.7M cumulative revenue generated since the company’s launch

  • Cabinet Health’s post-money valuation in February 2021 was $34.3M

    • Indicating that investors in 2021 believed the company was worth $34.3 million post-investment

  • Cabinet health is currently raising $1,070,000 (Of which they have raised $140,756 as of 6/30/22)

  • Investors can invest in Cabinet Health with a minimum investment of $150. The investment vehicle is a CROWD SAFE note, more detailed description of the terms and a link to the formal terms can be found in the "Terms" section of this investment memo below.