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Analyst Report: Upgrade for access Labdoor Brings Certainty to Supplements
Labdoor offers product testing and certification for supplements. The startup's product is strong, but its traction is lackluster.
- Company: Labdoor
- Security Type: SAFE
- Valuation: $20,000,000
- Min Investment: $100
- Platform: Wefunder
- Deadline: Dec 16, 2022
Like many Americans, I take a variety of supplements daily to stay healthy. I was a college athlete and fitness is still a major part of my life. I take a multivitamin, supplements that my doctor recommends, proteins after my workouts, and occasionally other pre-workout supplements. And I’m careful about the products I choose. I turn to user reviews and trusted nutritionist bloggers to pick which brands are best for my goals and my body. But aside from the education and certifications bloggers may hold, there is next to no scientific backing going into my decisions as a consumer. Given their popularity, it’s surprising that the U.S. Food and Drug Administration (FDA) does not approve dietary supplements. In fact, companies “often introduce a dietary supplement to the market without notifying the FDA,” and regulation often can’t actually begin until the product hits the market.
Labdoor is trying to fill this need by independently testing and certifying supplements, vitamins, protein, and cannabidiol (CBD) products for label accuracy and purity. The company gives a letter grade and score for popular supplement brands and reveals the actual contents in the products. For example, if a biotin supplement claims to have 10000.0ug of biotin, Labdoor reports on whether a sample met that claim and then tests for harmful ingredients like lead and arsenic. Tests and ratings are performed based on popular demand. Alternatively, brands can apply for a Labdoor product certification.
Labdoor makes money through affiliate marketing of products it has tested and by charging testing fees to grant certifications. (Learn the lingo: Affiliate marketing is where a third party website — in this case, Labdoor — refers customers to another company’s products. If the customer buys something through those referrals, the third party receives a commission from the sale.) Affiliate marketing used to be Labdoor’s main source of revenue. But the company is now more focused on its certification services.
The company is undoubtedly filling a crucial market need, but I am not convinced that this business model is sustainable. I spoke with co-founder and CEO Rafael Ferreira, who was candid about financial challenges they company has faced and how this move to product certifications could be its saving grace.
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