Cuddle Health Sleep - a US opportunity

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The new year continues strong - this time with another company of Hugh’s - famously described by me as the D2C guru.

As you all know by now - I love sleep. I also love science. Put them together and you have a company I want to write about.

Without further ado:

Cuddle Sleep Health™ is a science-backed brand platform focused on natural solutions to rest, recovery, and sleep. Restful night sleep is the foundation of a healthy, happier life. Science shows us sleep is the ultimate natural remedy for better immunity, stress management, focus, mood, hormonal balance and metabolic function.

Our first product, Cuddle’s Sleep+ Formula™, tackles the root cause of sleeplessness with 11 scientifically approved ingredients, in a delicious cocoa cinnamon blend that can be enjoyed nightly as part of a wind down ritual.

Having soft-launched the brand in September 2024 - with this round of investment they will;

• Accelerate the launch the brand in the US through Q1/2 2025. They have successful metrics from launch and are excited to continue to push into January when health and wellness is a focus.

• Continue to optimize supply chain, optimizing operations and refining COGs - working with 3rd party partners at Pelagic

• Ensure best in class DTC and growth marketing is set up with their fractional growth team and CGO, Derin Oyekan.

• Continue initial traction for the brand, continue to receive and iterate based on feedback on V1 of the product, build paid marketing funnel and retention marketing program.

• Explore clinical trials for the finalize formulation and work to build their scientific credentials alongside their Chief Scientific Advisor, Professor Russell Foster CBE FRA FMedSci. Dr Foster is Head of the Sleep and Circadian Neuroscience Institute at the University of Oxford.

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Stephen, their founder is a great guy and investor on the Shaman List — it’s all family here.

Highly recommend checking out the website.

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There are many reasons to be excited by Cuddle Sleep Health:

• Sleep has never been so problematic. 70% of Americans are sleep deprived and there has been a 56% increase in sleep disturbances since the pandemic. The impact of sleep deprivation is devastating on physical and mental health for millions. The recent Gallup poll suggests Americans are sleep less and more stressed than ever before. More than half of Americans say they need more sleep.

• Consumers are looking for solutions. The sleep aid market is on course to reach $118bn by 2031 but current solutions including medication, hormones, marijuana, and alcohol, aren’t working.

• The global melatonin market is $1.2bn and growing at 19% CAGR. Joshua Schall gives a great overview of the opportunity here.

• Content from authors like Matthew Walker and his book ‘Why We Sleep’ and Andrew Huberman have continued to grow in traction and are beginning to enter the mainstream. Andrew Huberman’s podcast is a Top 20 US podcast and it’s multi-part sleep interview with Matthew Walker has received millions of listens.

• There has been success in the sleep space with hardware (Casper and Eight Sleep and tech (Whoop and Oura but the opportunity in consumables remains a whitespace.

• There is a massive opportunity for a new consumables brand to become synonymous with sleep - combining content and products to own the nutrition pillar of the sleep economy.

• Cuddle Sleep Health™ will become a platform brand, launching products that solve for rest and sleep. They will launch with their first product, the Sleep+ Formula in August 2024.

• Cuddle's Sleep+ Formula™ is a science-backed sleep solution designed to fix broken bed-times. In Cocoa Cinnamon Cuddle contains 11 scientifically endorsed ingredients at efficacious dosage that replenish you daily and help you to get a better night’s sleep.

• Professor Russell Foster has joined Cuddle Sleep Health as our Chief Scientific Advisor. He is Head of Sleep and Circadian Neuroscience at the University of Oxford and his TED talk here and book are fantastic examples of his expertise in both sleep and circadian neuroscience.

• They have an amazing team in place with 3rd party operations support from Pelagic and their advisor (VP Operations at Seed, John Morgan). Their manufacturing facility and 3PL partner are both capable of national scaling.

• They have a best in class DTC and e-commerce team supporting the launch, with Derin Oyekan their fractional Chief Growth Officer.

• Available in a 30 serving monthly pouch and soon sachets for travel and hospitality – Cuddle Sleep+ contains no CBD, is plant-based and non-GMO.

• Cuddle will be an omni-channel brand, launching initially direct-to-consumer in the US, to build community and learning. Once ready, we will scale the brand into retail , Amazon and hospitality alongside product innovation.

• They are both second time founders, with experience in media, CPG, DTC and wellness. They have many lessons under their belts and strong networks globally – they have both built businesses that scaled in the UK and US previously.

• Cuddle is built on strong product margins, and we will use our network to seek distribution opportunities for cost-effective scaling.

• There are several powdered wellness brands seeing huge success, including; Athletic Greens ($1.2bn valuation), MudWater ($50m+ revenue) and Beam CBD, but none of the brands available in the market currently purely focus on sleep, rest and recovery as their primary objective.

• Cuddle will be a platform in the sleep space, where no brand is truly focused on rest and recovery currently. Initially focused on our Sleep Cocoa range, they will build a platform that can expand to new products and formats in future – as well as considering how this can scale into technology in future (e.g. sleep training content/tools/trackers/diaries and apps).

  They are raising $600k extension into their pre-seed funding via a SAFE note @ $6m cap (20% discount / 6% interest

If you’d like an intro to Hugh and the team, please drop me a note — to see the full deck, please subscribe below: