Startups Venture

Rael Raises $17.5M As Tampon Startups Go Organic

It turns out funding for startups isn’t limited to grocery delivery, ridesharing, and scooters. Some founders and investors are paying attention to a pain point-filled experience that many people face for years during their lifetime: menstruation.

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Today, Buena Park-based Rael, is announcing that it raised a $17.5 million Series A for its organic period products. Crunchbase News spoke with Rael CEO Yanghee Paik, about the company’s business strategies and the round.

Mirae Asset and GS Retail Fund led the investment with participation from Rael’s previous investors Softbank Ventures Korea and BAM Ventures. The startup, which was founded by Aness An, Binna Won, and Paik in 2016, had previously raised $2.8 million. It is not releasing information about its valuation.

Rael is not the only company in the organic period product space. Crunchbase News covered other period startups like Lola, Cora, and Flex that have also gained attention for their subscription-based, direct to consumer offerings.

Much like Cora and Lola, Rael is focusing in on customers that are interested in using organic tampons and pads.

“We all grew up in Korea using the Korean pads, and ever since we moved to the US we used the big brands that we could find in drugstores,” Paik explained. “A lot of them were not as well performing as we wanted them to be.”

The company says that it sources its certified organic cotton from Texas and assembles its products in Korea, where it has forged relationships with manufacturing partners.

Rather than relying first on a direct to consumer model, the startup launched on Amazon, where Paik says it became the number one organic pad seller.

“We really wanted to prove our product quality by being on Amazon and accumulate a lot of reviews and build our reputation,” Paik explained.

Since then Rael has expanded its product portfolio, adding organic, non-applicator tampons and biodegradable cardboard applicator tampons to its roster along with a line of skincare and feminine hygiene products. It also launched its direct-to-consumer site and a subscription model.

Paik told Crunchbase News that Rael’s Amazon sales still outweigh its direct-to-consumer sales, partially because the startup has not invested heavily in marketing and customer acquisition. This differs from Lola and Cora significantly, two startups that have spent heavily on social media-based marketing.

“With the funding, we want to do more consumer marketing and fuel the direct to consumer side even deeper,” Paik explained, adding that the team also plans to form partnerships with brick-and-mortar retailers next year as well.

The company currently has a brick and mortar presence in what Paik called the “Target of Korea,” and opened up and office in the country this year where five of its 25 employees are based. Rael plans to expand that global reach into other areas of Asia, where pads are the most popular period product, next year.

That’s a huge advantage for a small startup in a growing space, especially as consumers around the globe, not just in the U.S. and Europe, look to purchase organic products.

iStock Photo / LexCollection