Recently, Minneapolis-based health and wellness company DAO Labs announced backing by seasoned investor Mike Novogratz, to raise over $1M Via Reg-CF offering. The funds are to be used to accelerate growth to the company’s DTC and B2B initiatives. In this exclusive interview with TechBullion, Eric Karchmer, Co-founder and Chief Doctor at DAO Labs shares an updated report on the companies progress.
Please tell us a little more about yourself?
Dr. Eric Karchmer, Ph.D., MD (China), LAc.
I moved to Asia after graduating from college, in part to escape a career in medicine. I fell in love with the people, language, and culture. I eventually went back to the United States to pursue a PhD in Anthropology, but specifically to research traditional Chinese Medicine. Eventually, I graduated from the Beijing University of Chinese Medicine and opened an acupuncture and herbal medicine clinic in North Carolina while I completed my Ph.D.
About four years ago, I helped launch DAO Labs, a Chinese herbal supplement and services company with the mission of making this incredible practice more accessible to western consumers. DAO Labs helps with anxiety-induced sleep issues, to our newest formulas that help reduce symptoms associated with colds, fevers, and more. I have been able to amplify the work I typically do in treating my patients one-on-one and help our customers pursue their wellness goals through this powerful modality that I’ve devoted my life to.
When not working with DAO Labs, I’m currently on a Fulbright Scholarship in Taiwan, working with scholars and doctors of traditional Chinese medicine — the working knowledge that will help with our company and customers.
What is DAO Labs, could you give us an overview of the business?
DAO Labs is a traditional Chinese herbal medicine company that offers a more western approach to this ancient, powerful practice. Without losing focus on authenticity or purity, we offer convenience to a practice that in some cases can be hard for western consumers to approach and integrate into their wellness routines.
Our business is divided into two parts: We’ve created a line of herbal dietary supplements in both powdered and pill form to support a variety of needs — from sleep to women’s health, immunity to joint health. In response to the 2020 experience, we launched two formulas that treat symptoms such as fevers, sore throats, coughs, and lung support – all-embracing the 2,500-year heritage of Traditional Chinese Medicine — again with an eye toward authenticity and purity.
We also offer a telehealth service, allowing consumers to bring the benefits of this practice into their lives without having to initially visit an acupuncturist. These sessions involve connecting with an acupuncturist to pursue one’s health goals through herbs, diet, breathwork, and other behavioral changes.
What problems were traditional Chinese medicine facing before now and what solutions are you providing?
The biggest hurdle we’ve found is the challenge of getting started with a practice that is as beautiful and powerful as it is foreign — and in my opinion, is something that’s justifiably solvable. Throughout my career, I’ve seen very serious medical needs addressed and solved, particularly in instances where western medicine has fallen short, through traditional Chinese medicine.
At DAO Labs, we’ve created an on-ramp to this practice – through content where we breakdown important concepts like “Qi,” “Yin” and “Yang,” to packaging decisions that speak more to our target consumer –who we find very much embraces this practice — but just needed some handholding to get started.
What is the current global market size of the dietary supplement market and what integrative health trends should we look out for?
Even prior to the pandemic, trends in dietary supplements were exploding. According to Mintel, U.S. sales of vitamins, minerals, and supplements will grow from approximately $25.9 billion in 2019 to $32.1 billion by 2024.
But an even more exciting data point is the growth in global herbal botanicals and acupuncture, which is forecasted to grow at a nearly 20% CAGR from 2019 to 2027, bringing the category to $165.11 billion. This doesn’t surprise us — interest in acupuncture was booming prior to the pandemic, and the entire experience has people focusing on alternative options.
Our current formulas are in big categories that are growing — such as our Immunity support formula, which we struggled to keep on the shelves last year, to our cold series solutions herbal pills.
And I haven’t even touched upon the growth opportunity with our telehealth initiative.
Tell us more about your business model, what makes you unique and how you are helping your customers?
Sure: We have two primary channels: direct-to-consumer (“DTC”) and Direct-to-Practitioner (“B2B”) and do not operate through third-party distributors or resellers. This allows us to control the consumer experience while preserving margin in the process. At present, we do not sell to major retailers or other natural food stores, where from experience, it’s challenging to both educate the consumer and make money.
The decision to work with our customers and practitioner partners on a direct basis allows us to provide a better overall experience, filled with educational literature, hand-holding, sampling, and order customizations. To this last point, you’ll see a lot more personalization being introduced as we close this round.
Wellness consumers have a lot of options – and a lot of questions. By working on a direct basis, rather than simply landing on retail shelf space to collect dust, we’re able to create a lifetime experience with our customers because we offer solutions in such different categories, the relationships are something we take very seriously.
DAO Labs to raise over $1M via Reg-CF offering, how will this fund be used?
The funds from this round will primarily be deployed to marketing tactics related to customer acquisition and technological upgrades to the customer experience. As I said above, we’re in some very large categories, and we’re still a young company. The funds will be used to expand our customer base across both channels, hopefully helping more people in the process.
WHY should we invest in DAO Labs, what are the benefits?
We’re on a mission to transform health and wellness through the healing powers of traditional Chinese medicine. We feel that an investment in our company is also an investment in your health.
We’re very comfortable with the Reg-CF process as it allows more people the ability to participate in a type of offering that was previously not available, while also creating a group of shareholders we intend to make advocates for this practice. Investors receive various benefits depending on their investment level, but all are considered brand advocates and loyalists – helping in the journey of growing our customer base while also helping folks achieve their wellness goals. In a way, the entire process has the feel of a customer acquisition campaign, but one with the upside of becoming shareholders in the process.
DAO Labs is fast gaining traction, what is the secret, could you share some of your success stories with us?
A lot of grinding, trial and error, sampling, and listening. Through engagement with our customers and practitioner partners, we’ve found a gear that works from a communication and acquisition standpoint, and we try to not deviate too aggressively from this.
Could you share some of your visions with us, what is next on your roadmap after this Reg-CF funding?
One of the exciting aspects of Traditional Chinese Medicine is that it does so many different things. There are hundreds of classic formulas that help with everything from skin and hair support, to much more serious wellness needs. I am never short of amazed by what traditional Chinese herbal formulas can do. In a way, with our limited portfolio, we’re just getting started.
There’s also tremendous upside on the services side, so stay tuned.
Tell us more about your team of Medicine Doctors, Consumer Experience, and Culinary Artist, what makes you special?
While I’m DAO Labs Chief Medical Officer, through my career I’ve developed a network of academic and practitioner colleagues from across the world. I collaborate with them regularly. Most recently when we developed our cold season solutions formula, for which I consulted some of the leading Doctors of Chinese Medicine in Wuhan, China. Moreover, we rely on a team of acupuncturists to help with the content that we publish on our online magazine, The Way.
One of your early investors is Mike Novogratz of Galaxy Digital. What’s the connection between Traditional Chinese Medicine and Cryptocurrency that got Mike involved?
Even though this practice has been around for 2,500 years, it’s still very new to the West. In a way, we’re disrupting health and wellness trends in a category that is enormous. Mike understood the opportunity and jumped in, as he’s not averse to big opportunities that disrupt the status quo.
Do you have any other information to share with our readers?
We encourage you to visit https://mydaolabs.com to learn more about our formulas, paying particular attention to our new Bounce Back and Breathe Clear formulas that we advise everybody to keep on hand. If you’re interested in becoming an owner and joining our movement, please visit our Reg CF campaign page at https://www.startengine.com/dao-labs.