Musely, a direct-to-consumer telemedicine platform that specializes in compounded treatments for skin, hair, and menopause care, has secured over $360 million in non-dilutive capital from General Catalyst's Customer Value Fund (CVF). The company's CEO Jack Jia told TechCrunch he wasn't even looking to raise money when CVF came calling last year - because Musely, which started as a wellness community in 2014 before pivoting to prescription skincare in 2019, has been cash flow positive for years. Jia had been turning down VCs who wanted a piece of his ownership so frequently that it was practically a hobby.

Unlike traditional venture capital, CVF isn't taking an equity stake or offering a loan with interest. Instead, it's offering a revenue-share agreement: companies with predictable revenue borrow capital and repay it along with a fixed, capped percentage of revenue generated from using the fund. Jia was initially skeptical but says he quickly realized the terms were better than a standard bank loan and far cheaper than a dilutive equity round. “When I mathematically modeled it, I found this absolutely compelling,” he said, because nothing says excitement like a spreadsheet.

Musely has been growing revenue about 50% year-over-year and has served over 1.2 million patients, but acquiring new customers for DTC brands is expensive. As Jia put it, “When you become a billion-dollar revenue company, you need another billion in order to grow to the next billion.” The funding will support sales, marketing, and other customer acquisition efforts - essentially providing a war chest for buying more customers. Musely joins a CVF portfolio that includes Grammarly, Lemonade, and Ro, and the fund's capital comes from its own distinct limited partners, not General Catalyst's last $8 billion fundraise.

Musely has been remarkably capital-efficient compared to peers: after raising $20 million from DCM and others in 2014, it hasn't taken a single dollar of equity since. Patients access prescription products through asynchronous consultations with board-certified dermatologists and OB-GYNs, which is a fancy way of saying they can get a prescription without ever having to put on pants.