Before and After in the Cellulite Market
This article was originally published in Start Up
The medical aesthetics market is hot, and at the moment, much of that heat is coming from a tantalizing emerging market for the treatment of cellulite. Consumer demand is so great for cellulite treatments that a $3 billion cosmeceutical market has been created around lotions and massagers with minimal efficacy. To reach a potential blockbuster market--85% of women have cellulite--new device companies aim to demonstrate efficacy with the same discipline that they have brought to traditional therapeutic markets, hoping to create competitive and sustainable advantages.
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The aesthetics industry is becoming increasingly competitive and there are very few intellectual property barriers to entry; as soon as one company develops a new wrinkle-reducing device, it's not long before others come up with something that sounds similar. Sales and marketing account for the biggest costs of medical aesthetic companies, and because a number of the newer one-product companies now find themselves bumping into their competitors in physicians' offices and at trade shows, consolidation in the industry appears to be in order. In this challenging environment, the recent merger of skin tightening company Thermage with skin resurfacing firm Reliant is designed to create a stronger competitor.
In Vivo analyzed recent public and private device financings to determine the comparative strengths and weaknesses of the various types of device financings, and further broke down the investments by therapeutic categories to examine what areas are hot and which ones are not. We found that the device industry has rebounded from a dismal public market and is showing strength among both public and private investors, resulting in a sector well-positioned for continued growth.
As venture capitalists begin counting cosmetics and aesthetics companies as part of their portfolios, they're also migrating toward investing in consumer-oriented companies including those that make aesthetic devices to be used in the home.