Revero

Revero is raising capital via a SAFE at a valuation cap of $30 million and no discount. The company had $589,658 in 2020 revenue – but that figure includes $241,180 Revero raised through GoFundMe. The company reported $338,410 in 2020 profit. Therefore, the company is overvalued, with an 86x operational revenue-to-valuation ratio. Additionally, the 0% discount rate in Revero’s round is not beneficial to early investors as they will not receive any additional shares at conversion. Revero’s price and investment terms are substandard.

Revero intends to operate in the North American clinical nutrition market. Clinical nutrition is a branch of medicine that adapts diet to help patients cure chronic diseases. This market was worth $4.8 billion in 2021 and is expected to grow at an annual rate of 4.8%. It is a rather small market that is experiencing slow growth. 

Revero hopes to heal millions of patients from chronic conditions and charge insurance providers for its service. Unfortunately, the company’s product is currently a simple tool to incentivize clients to adopt a carnivore diet made only of animal-based products. This diet mostly helps clients lose weight, which may contribute to the treatment of conditions such as obesity and eventually diabetes. However, the carnivore diet is unlikely to work for every patient. It is high in saturated fats and is easily high in sodium, which puts patients at higher risk of high blood pressure and cancer. Revero doesn’t inform patients of these risks and does not seem to gather data on patients’ profiles. Therefore, as of today, Revero doesn’t appear to be capable of ever treating millions of patients suffering from chronic conditions. 

Revero’s current product doesn’t operate in the clinical nutrition market, although the company plans to. For now, the company is part of the low-carb (keto) diet market, which is projected to reach $1.3 billion globally in 2024 with a 5.7% annual growth rate. Revero’s addressable market is even smaller, as the company only targets the United States and doesn’t just offer a low-carb diet but a more restricted carnivore diet. The market is also crowded with numerous websites, books, and coaches. Therefore Revero’s market potential is low, and the company’s current product has few chances of reaching out to new customers.

At first glance, Revero’s team appears complementary and tailored for the company’s vision. Mahsa Rostami, co-founder and CEO, has about three years of experience working on machine learning and data prior to joining Revero. She was a machine-learning engineer at Danaher Digital LLC and at KPMG US, where she studied data sources and developed algorithmic solutions. Previously, she worked at MoneyGram International as a senior data scientist. She holds a bachelor’s in business administration from the University of Isfahan. She also has a degree in industrial engineering and a degree in applied statistics data mining from the University of Texas. Her background seems to be adequate to the company’s goal.

But surprisingly, Revero’s current platform currently doesn’t collect any data on customer’s health or diet. It would make sense for the company to begin gathering health data from current clients in order to reach its future goals – but that hasn’t happened. As Revero’s co-founder and only in-house machine learning specialist, Rostami should be at the forefront of those efforts. The company’s inaction and lack of real pivot since rebranding from MeatRX calls into question Rostami’s dedication. 

The company’s second co-founder and chief medical officer is Dr. Shawn Baker. Having a medical doctor as a founder is key for a company that aims to heal chronic diseases. However, Dr. Baker isn’t specialized in nutrition or chronic diseases. He is an orthopedic surgeon. He officiated for a year and a half in the US Air Force, including six months in Afghanistan during 2007. He was also a lead surgeon in the Presbyterian Medical Group between 2011 and 2015. In 2019, Dr. Baker wrote The Carnivore Diet. The book made him famous in the carnivore diet community. Dr. Baker has 222,000 followers on Instagram, 96,700 on Twitter, and 25,000 on TikTok. This strong social media presence is an asset for Dr. Baker to market his company to his followers. 

However, investors should note that Dr. Baker’s book has been criticized for its lack of scientific statements. Indeed, in an interview in 2020, his explanations on the carnivore diet were limited to anecdotes, personal deductions, and anti-veganism statements. On a fundraising page, he acknowledges that there is currently no scientific evidence backing up the effects of the carnivore diet on chronic diseases. In fact, many might argue this diet can lead to a vitamin deficiency and other complications.

Even if the founders use the terms “our physicians” on their raise page, the team is limited to Rostami and Dr. Baker. Revero currently lacks essential staff, including qualified dieticians, marketing professionals, and machine-learning engineers. Dr. Baker’s background isn’t strong enough to develop the nutritional wing of the company alone. His nutritional knowledge is limited to the rather controversial carnivore diet, and this might prove unattractive to many qualified physicians and nutritionists who could potentially join the team. A founder’s leadership and open-mindedness are essential to building a strong team, so Dr. Baker’s strong adherence to one specific diet may restrict the company’s consumer base and ultimate development.

Therefore, Dr. Baker’s lack of scientific knowledge on diets and chronic diseases is concerning for the growth of the company. But his popularity on social media has been an asset for the company so far, and Mahsa Rostami’s knowledge in machine learning is essential for Revero’s vision. How the company manages to grow its team beyond these co-founders will have a strong impact on its potential success.

Revero claims to compare to Livongo. Indeed, Revero’s project of personalizing diets thanks to artificial intelligence (AI) to heal chronic diseases could be life-changing for many patients. Unfortunately, while this is the company’s vision, it does not have anything in common with Livongo as of today. 

Livongo is a service supported by many health insurance companies that helps patients manage their diabetes and blood pressure through data. The service vets clients by asking for personal and medical information upon registration. Then, it enrolls patients in its program, using user data such as blood pressure, glucose and daily steps to help patients manage their health. Livongo doesn’t claim to be powered by an AI, but it is data-driven. 

Unfortunately, Revero is far from reaching milestones that would make it truly competitive with Livongo. For now, Revero is not an AI-powered platform that can cure patients of chronic diseases. It is only a series of videos on carnivore diets and fasting, a set of pre-recorded webinars, an inactive forum, and coaching sessions requiring additional payments of $18 per session. Unfortunately, these services make Revero a simple carnivore-diet company that can compare to hundreds of other diet programs. Its product seems to lack potential for growth and doesn’t demonstrate any ability to become an AI-powered tool solving the root causes of chronic diseases.

Revero’s homepage and Republic raise page are misleading as they do not clearly represent the actual state of its product. It is a risky strategy that can mislead uninformed customers and potentially have disastrous consequences on their health. The “success stories” that Revero presents on its Republic raise page are examples of people following the carnivore diet. These few stories are mostly weight loss examples that do not prove the company’s ability to treat chronic health conditions.

One could think that Revero’s current product is simply a step in transitioning to the founders’ vision. But Revero has not implemented simple features that would allow it to collect data for its future artificial intelligence. Revero’s platform only asks for user’s payment-related information. It does not collect data on customer’s health or diet. Therefore, the company is currently unable to adapt diets to patients, nor can it collect the necessary data to build its product. 

At this point, Revero doesn’t seem to be strategically growing its AI, and it lacks the personalized nutritional guidance of its competitor Livongo. Investors might be wary of the fact that Revero is making large claims about its capabilities with little action backing up those claims.

Revero’s performance is impressive for a young startup raising online. Indeed, in 2020, Revero had a profit of $338,410, with only $589,658 in revenue and around $1.1 million previously raised. Additionally, Revero has no long-term debt as of 2020 and claims to have 2,800 paying customers.

However, looking closer at the company’s financial statements, this reported revenue might be somewhat misleading. From the $589,658 of 2020 revenue, only $348,478 came from operational revenue. It looks like operational revenue solely comes from co-founder Dr. Shawn Baker’s network, which ultimately is a limited source. The additional $241,180 was raised through a GoFundMe campaign on the idea of leading a carnivore diet clinical trial. Unfortunately, investors are not informed of this campaign or of the research on the company’s Republic raise page. This previous campaign also raises questions about whether the founders are focused on making a carnivore diet company or an artificial intelligence (AI) product. Indeed, the company changed its name from MeatRX to Revero in 2021. However, it seems that about a year after this pivot, Revero’s product has not substantially changed.

The company’s $338,410 profit would be great for a small business. However, it is too high for a startup that is trying to scale. In 2020, Revero only spent $96 on sales and marketing and $205,128 on general and administrative expenses, which are related to lease, utilities, insurance, and wages. The company has enough revenue to improve its website, begin developing its AI, and increase spending on marketing and sales. Rather than holding onto its revenue as profit, an early-stage company like Revero would benefit more from building for future operations. 

At first glance, Revero’s financials are exceptional for a young startup raising online. The company has healthy profit and no debt. But looking closer, the total revenue and amount raised do not properly reflect the company’s operations. The performance of the company in 2020 and the slow progress of its product do not demonstrate enough execution capabilities toward Revero’s claimed goal of AI-powered health recommendations.

Revero is a risky investment. Building an artificial intelligence (AI) requires collecting a large amount of data points, and there is no evidence yet that Revero’s future AI will succeed in treating the root causes of chronic diseases. But most importantly, the founders’ ability to execute their goals seems uncertain. Revero’s current product doesn’t collect any health or diet data on customers upon registration. This data is essential to build an AI, and Revero is losing time and money by not collecting it. Investors may question Rostami’s capacity and Dr. Baker’s willingness in building Revero’s claimed vision.

Additionally, despite higher profits than most early stage startups raising online, Revero’s founders didn’t add anyone to the team. Yet the business needs software product improvements, qualified dieticians, marketing professionals, and machine-learning engineers. Many might be concerned about investing in a company that isn’t reaching significant milestones despite being profitable. Furthermore, Revero’s platform is only offering carnivore and fasting advice, access to webinars, an inactive forum, and a list of coaches. The founders’ indiscriminate recommendation of a carnivore diet raises concerns about the platform’s ability to target and remove the causes of chronic diseases. 

Finally, many data points about Revero appear misleading. In 2020, about one third of the company’s revenue came from a GoFundMe raise rather than coming from paying customers. Rather than directly improving the company’s product, the founders want to use that money for scientific research to prove the benefits of the carnivore diet. Not only is there a risk that this research will be biased, but it is not mentioned on the Republic raise page. Therefore, it seems that the company either lacks a clear vision or adapts its speech to its audience. In any case, lack of clarity in the company’s execution brings a risk, as investors cannot fully verify its claims of past and future milestones.

There are numerous reasons why investors should have doubts about investing in Revero. Indeed, more than 40% of the company’s $589,658 revenue in 2020 comes from a GoFundMe on the project of leading a scientific experiment to prove the positive effects of the carnivore diet. The team doesn’t have any expertise in chronic diseases or in nutrition science at all. It also offers conflicting data across sources. On its GoFundMe raise page, the team admits that it lacks clinical data on the efficacy of a carnivore diet. However, those uncertainties are not repeated on its Republic raise page, and Revero claims that it can already treat the chronic conditions of many people. A carnivore diet goes against many nutritional recommendations and is unlikely to offer a viable strategy for treating a wide array of chronic diseases. Furthermore, Revero’s platform has no artificial intelligence (AI) capabilities right now, but the company claims to already be using AI to treat patients on its Republic raise page. 

Revero already raised more than $1 million, but the platform’s premium content is restricted to videos about the carnivore diet, links to online Zoom meetings, and fitness challenges. There’s currently not much to justify the subscription price of $15 a month except for exclusive access to co-founder Dr. Shawn Baker’s content. Currently, Revero’s platform is not collecting data on clients’ chronic health history or eating habits, so the company’s promise of personalized diets based on AI in the future seems far from being fulfilled. Revero’s lack of product development might make investors wonder about the use of the high profits generated by the company since its inception and therefore question the founders’ ability to put this current raise to good use. As of today, the product is radically different from the founder’s claims on their Republic page.

Furthermore, the profit the company generated in 2020 is too high for a business that wants to scale. Revero would have been wiser to use part of its profit to develop and market its product. It is possible that the founders pivoted the company mid-2021 from a carnivore diet company to an AI company. Indeed, Revero was called MeatRX in the first quarter of 2021. However, the name has been changed for close to a year, and the platform still doesn’t collect health data on users. Therefore, the company is underdeveloped compared to its funding and Dr. Baker’s notoriety.

The company’s upsides are limited to its co-founder and chief medical officer, Dr. Shawn Baker. Putting together his Twitter, TikTok, and Instagram accounts, Revero’s CMO accumulates more than 300,000 followers on social media. This strong presence surely played a large role in Revero generating $348,478 of operational revenue in 2020, with only $96 spent on marketing and sales. As a result – and thanks to additional revenue from a GoFundMe raise – Revero achieved an impressive profit in 2020. Although Revero’s capacity to expand beyond the carnivore diet community is a concern, Dr. Baker’s impressive network gives the company a potential base of loyal customers from the onset.

Currently, Revero is a platform focused on helping clients adopt a carnivore diet, strictly based on eating animal-based food. In the future, Revero wants to become an artificial intelligence (AI) platform recommending personalized diets to treat users’ chronic ailments.

The company generated a profit of $338,410 in 2020 and has about 2,800 customers. Revero was founded by Mahsa Rostami, a machine-learning engineer, and Dr. Shawn Baker, an orthopedic surgeon whose large network of social media followers has been a key part of the company’s traction so far. If it works, Revero’s product could help millions of patients suffering from chronic conditions.

However, there are several concerns about Revero that investors should consider before investing. Although the company was profitable in 2020, its revenue was inflated by its only other traceable raise, a GoFundMe campaign for clinical trials on the carnivore diet. Despite being profitable and having past raises, the Revero team is still limited to its two co-founders. Currently, Revero’s product is only a carnivore diet and weight loss program. It is far from being an AI-powered health recommendation platform and is radically different from claims made on the company’s Republic raise page. Indeed, upon registration, Revero’s current platform does not even collect information on clients’ diets or health conditions. This lack of data collection calls into question just how committed Revero is to developing an AI tool. Co-founder Rastami appears to be well-qualified for AI development, but her influence is not apparent in Revero’s operations. Instead, Dr. Baker and his focus on the carnivore diet appears to be the guiding force in the company. Dr. Baker is an orthopedic surgeon with no qualifications in nutrition or chronic disease treatment. All of these factors cast heavy doubts on Revero’s ability to create what it has promised. In addition, the valuation-to-revenue multiple for this funding round is not favorable for investors. Therefore, Revero’s raise has been rated an Underweight Deal.

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Analysis written by Léa Bouhelier-Gautreau, March 11, 2022.