Lora DiCarlo is raising funds via Crowd SAFE at a $40 million valuation cap with a 10% discount. Though this cap is higher than the majority of companies currently raising capital through the online private markets, it is more than reasonable given the stage of this company. Just last year, Lora DiCarlo reported more than $7 million in revenue, making the revenue multiple in relation to the company’s valuation quite attractive. Thus, the price score for Lora DiCarlo is strong. 

Likely due to the COVID-19 pandemic, the United States saw a clear spike in the sex toys market in 2020. Globally, the market was valued at $33.64 billion in 2020, and the US accounted for just over $7 billion of that. The expected CAGR for the period between 2021 and 2028 sits at 8.04%, indicating steady but not rapid growth. Toys targeting women, like Lora DiCarlo’s product offerings, make up the majority of market demand. As suggested by Grand View Research, “Liberalization, penetration of social media, and the influence of pop culture have resulted in increasing awareness about the importance of sexual health,” likely contributing to the market’s moderately high CAGR. Despite that healthy growth rate, the overall market is still rather small. Lora DiCarlo’s market score is its lowest across all five metrics as a result.

Lora Haddock DiCarlo founded the company in 2017 and shortly after brought on model and actress Cara Delevingne as a co-owner and creative advisor. Prior to founding the company, DiCarlo spent time at a holding company she co-founded for food and beverage operations. She also has experience as an executive assistant and in medical administration. Prior to this, she was a midshipman in the US Navy. 

DiCarlo has no prior exits and her only direct industry experience is her four years with the company, making the company’s team score relatively low. DiCarlo has, however, surrounded herself with a supportive team with complementary backgrounds and celebrity reach. COO Doug Layman already has several exits under his belt. DiCarlo has also brought on dedicated sales and marketing team members, a smart move for a fast-growing consumer packaged goods (CPG) company. 

Lora DiCarlo’s differentiation score is among its highest and rightfully so. From a quality standpoint, the products stand out amidst competition with features like warming technology and thoughtful, inclusive designs. These products are also highly defensible, as the company has 13 patents pending. 

The products are on the more expensive end of the spectrum, however, and leave little room for differentiation by way of price. Toys range from $95 to $290. This price point is likely reflective of the quality of the toys. However, it may be out of reach for some of the market, especially those users with little experience just looking to explore. Other, larger incumbents, like Adam & Eve, offer products that start as low as $20.

With more than $7 million in revenue reported for the most recent fiscal year, Lora DiCarlo’s impressive performance rating is clearly deserved. That figure is up from $0 in revenue the year prior. The company has also raised $7 million in prior funding from reputable venture capitalists (VCs) and investors including Republic Labs, Romulus Capital, River Bend Capital, VU Fund, Gaingels, and model and actress Cara Delevingne.

It should be noted, however, that the company is still not profitable and has a monthly burn of just over $349,000. In all, this is to be expected of a young CPG company and should not be the cause for too much alarm.

Risk associated with an investment in Lora DiCarlo is middle of the road. Founder Lora DiCarlo is dedicated full time, and the products are already in production and generating revenue. The team will need to be able to scale production as demand continues to increase. Any team risk is somewhat mitigated by the support network DiCarlo has surrounded herself with, not to mention the likely support she will receive from venture firms that have committed capital. 

First and foremost, Lora DiCarlo’s product line is expensive in a sea of competition. One of the products, Ose, has also received a significant amount of customer complaints, including reports of the product being painful and having a steep learning curve. In fact, in 2019 it was banned from the influential tech event, CES, but returned in 2020. Finally, the company has a long way to go to reach profitability with a monthly burn rate of $349,000. 

In one year since product launch, Lora DiCarlo went from $0 to more than $7 million in revenue. Debt and losses are decreasing, despite having a high monthly burn. Given the revenue that the team brought in last year, the valuation for this round is more than reasonable. Adding actress and model Cara Delevingne to the team was a brilliant marketing move and will likely propel traction in an otherwise fragmented market that lacks significant name brand recognition. The number of VCs that have backed the company is also very encouraging. Finally, Lora DiCarlo is undoubtedly a global brand with a reach beyond the US, making the serviceable obtainable market quite promising.

Overall, Lora DiCarlo is a strong CPG company with immense traction that presents investors with the opportunity to back a queer female founder on a mission to create more inclusive products. The sex toy market is large and fragmented with few, if any, household names. The company’s traction is undeniable with more than $7 million in both revenue and funding from the past fiscal year. Products are heavily differentiated from a quality standpoint, though that differentiation comes with a higher price point. 

This is not to say that a potential investment is without risk. Founder Lora DiCarlo has little past industry or entrepreneurial experience. This is somewhat mitigated by the team that she has surrounded herself with, including model/actress Cara Delevingne. Additionally, there have been some product concerns around Ose, one of the primary offerings (and the most expensive). These concerns have made headlines, something that potential investors should be aware of. Granted, this kind of press, though negative, could absolutely result in increased attention and therefore demand. 

After much consideration, Lora DiCarlo has been rated a Deal to Watch by the KingsCrowd investment team.

For questions regarding the KingsCrowd staff pick or ratings for this company, please reach out to support@kingscrowd.com. 

Analysis written by Olivia Strobl.