As a society, spend so much time trying to get in shape and also spend billions on the latest and greatest when it comes to supplements to enhance fitness regimens. Yet most of these supplements are off-the-shelf solutions that do not take into account an individual’s physiology. Gainful, a personalized sports drink and nutrition company, provides tailored supplements, making pro-level sports nutrition accessible. The company focuses on three types of supplements – protein, hydration, and pre-workout. Customers initially take a quiz to determine their present level, goals, and routines and then are able to put together a package that’s delivered monthly. The service offers support, when needed, with a registered dietician to address any concerns and track progress. All of the company’s products are made with natural and organic ingredients like pea protein, brown rice protein, oat powder, coconut oil, monk fruit, green tea extract, and micellar casein, a slow-release protein.
AlleyWatch caught up with Cofounder and COO Eric Wu to learn more about how his own experience developing supplements led to the formation of Gainful, the experience of fundraising as a first-time founder and recent college graduate, and the company’s Series A funding round.
Who were your investors and how much did you raise?
We are incredibly excited to announce Gainful’s $7.5 million Series A round, co-led by BrandProject and Courtside VC. A number of other investors joined the round, including AF Ventures, Round13 Capital, Barrel Ventures, and the founder of Polaris Sports—a leading global agency representing some of the most high-profile athletes and sport personalities in the world.
Tell us about the product or service that Gainful offers.
Gainful makes personalized sports nutrition products, starting with Protein Powder, Hydration, and Pre-Workout. Customers take a simple, 5-minute quiz at Gainful.com and our proprietary algorithm tailors a blend of high-quality ingredients to each individual’s unique body type, dietary needs, and fitness goals. We also give every customer free, 1-1 access to their very own Registered Dietitian, who is always available to answer any questions about nutrition or fitness.
We’re particularly excited about our most recent product launch: Personalized Hydration. Designed by Gainful’s Science Advisory Board, these electrolyte drink mixes are custom-formulated for your individual exercise frequency, intensity, and sweat level to support faster recovery and better performance. Gainful Hydration contains an individually-tailored amount of four key electrolytes as well as just enough sugar to activate sodium-glucose co-transport, which hydrates your body’s cells faster than water alone.
What inspired the start of Gainful?
Gainful’s story actually begins all the way back in high school, where my cofounder, Jahaan Ansari, and I were on the same soccer team. Our teammates and friends would drink nasty protein shakes with no real idea of the benefits or ingredients. Jahaan and I never touched supplements because they were intimidating, difficult to understand, and tended to have over-the-top, macho branding.
As a senior at Georgetown University in 2017, my time playing soccer competitively was coming to an end, and I finally decided to take my nutrition and fitness more seriously. I went looking for a good beginner’s protein at my local supplement shop and was horrified by the options. None of them spoke to my aesthetic, and all of them terrified me upon realizing the labels were packed full of unpronounceable junk.
I went back to my apartment and began buying up raw ingredients, mixing them up in Tupperware containers like a mad scientist. I eventually settled on a protein blend that suited my goals, fit my dietary needs, and made me feel good. I ended up telling Jahaan (who, at the time, was finishing up his degrees in Computer Science & Chemical Engineering at UC Berkeley) about this quirky protein project of mine, and he immediately latched onto the idea. As it turns out, Jahaan had a deep interest in nutrition and recognized the immense potential of personalized sports nutrition supplements.
Our frustration with the options available to us in 2017, paired with the question, “What if we could make nutrition for everyone?” was the start of Gainful – personalized, clean nutrition for every body.
How is Gainful different?
Gainful brings pro-level personalization to everyday sports nutrition. Personalizing our supplements to the individual allows us to offer customers a level of transparency, guidance, and quality that is unrivaled in sports nutrition. As part of our commitment to making personalized nutrition accessible for everyone, we give every customer free, 1-1 access to their very own Registered Dietitian.
Gainful also uses simple, effective ingredients with no fillers and no artificial colors, flavors, or sweeteners. Our blends are all gluten-free and soy-free. Additionally, unlike other protein brands that sell bulk-size, pre-flavored tubs, Gainful Protein comes unflavored with a free supply of single-serve “Flavor Boosts” in seven different flavors, so customers can try a new flavor every day!
What market does Gainful target and how big is it?
Gainful is tackling an outdated $47B dietary supplement industry. Our product is designed for any active individual with a fitness goal, or anybody looking to kickstart an active lifestyle.
What’s your business model?
Because our customers actively and persistently choose to live their life on a healthier level, Gainful’s personalized products are delivered direct-to-consumer as a subscription.
How has COVID-19 impacted the business?
All of Gainful’s products are sold exclusively via our e-commerce site, and we don’t yet have any presence in retail stores. The pandemic caused more Americans to shop online than ever before, and Gainful experienced tailwinds as a result.
More importantly, however, people now care more about their own health and what they’re putting in their bodies. This arc toward mindful eating and living is something we always saw coming, but COVID-19 certainly accelerated it. People all over the world are being more thoughtful about their nutrition, health, and wellness – and we think this will only continue to trend up as people get outside again and realize how fundamental health is to living a good life.
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What was the funding process like?
2020 was a strange year for everyone, and our unconventional approach to raising our Series A was fitting for 2020. Throughout the entire process, we didn’t even have a pitch deck. At no point did we create a target list of lead investors and reach out methodically – it was a very organic process from start to finish.
At the beginning of the pandemic, we raised a bit of money on a convertible note, mostly from existing investors. At that point, with the world so uncertain, we had fully planned on putting our heads down and weathering the storm.
There were a few trailing conversations with very strategic, value-add investors that we really liked. We weren’t fundraising, but we entertained the conversations because we liked the investors and what they could bring to the table. Before we knew it, we had competing term sheets and were in the incredibly fortunate position of being able to pick and choose folks that we wanted to bring into the fold. We even had the option of raising a larger round, but actually declined because we don’t need the money – our metrics are stronger than ever and our business was designed from the outset to be able to sustain strong growth without flying through VC dollars.
What are the biggest challenges that you faced while raising capital?
This Series A fundraise was certainly an anomaly because we didn’t do much pitching and never even put together a presentation. To date, however, a struggle that Jahaan and I have faced was our inexperience. While we’ve always been confident in our ability to lead Gainful to an extraordinary outcome, it’s understandable that investors are wary of two first-time founders fresh out of college. While no VC will outwardly admit to it, it’s clear and understandable that they’d prefer to back entrepreneurs with more of a track record. We started this company at the age of 21. I’m 25 now, and have seen plenty of competition come and go. Gainful has made steady progress by keeping our heads down and focusing relentlessly on listening to customers and improving our product. It has served us well so far.
What factors about your business led your investors to write the check?
For years, personalized nutrition was reserved for only the world’s high-performing, professional athletes. Our investors recognized the power of our value proposition for customers – we’re bringing this pro-level personalization to the everyday athlete. Most importantly, our investors have invested in a personalization platform. The data that we’re gathering is incredibly rich and powerful – it allows us to quickly develop products and experiences in complementary categories of nutrition that are just as massive as protein powder and hydration (each multibillion-dollar markets on their own). Moreover, these products will work more effectively for customers and generate more loyalty than their generic competitors. We can personalize all sorts of products not just within sports nutrition, but across all of supplements. We are beyond lucky to have brought on investors that I would consider to be the best in their respective specialties: direct-to-consumer subscription, high-performance sport, and CPG. It’s an absolute dream team, and I still have to pinch myself every day.
What are the milestones you plan to achieve in the next six months?
We’re very excited to tackle an aggressive product launch strategy in 2021. The team is ready to work on more flavors, more complementary products, more core products, and deeper personalization throughout every touchpoint of the customer experience.
In addition, we can’t wait to bring on more world-class team members to help us achieve our mission of bringing personalized nutrition to everybody.
What advice can you offer companies in New York that do not have a fresh injection of capital in the bank?
When we participated in YCombinator, we were told that the absolute best (and only guaranteed) way to raise VC money is to improve your business. A profitable, growing business with happy customers gives founders every advantage when it comes to garnering and closing venture investment.
If your business is in a tight spot, your first thought should not be to raise capital to keep going. Your first thought should be to improve your product, delight your customers, and through those achievements unlock stronger business performance. One way or another, investors will sniff out strongly performing companies.
If your business is in a tight spot, your first thought should not be to raise capital to keep going. Your first thought should be to improve your product, delight your customers, and through those achievements unlock stronger business performance. One way or another, investors will sniff out strongly performing companies.
Where do you see the company going now over the near term?
On January 11th, 2021, we launched our newest Flavor Boost – Matcha Green Tea! We’re looking forward to making more fun flavor announcements this month, and making even bigger splashes throughout 2021. 2020 was a very strong year of growth for Gainful, but we’re setting our sights even higher in 2021.
There’s a palpable sense of momentum at Gainful – everyone on the team knows that 2021 is our year. If you hadn’t heard of Gainful before now, you’ll be hearing a lot more about us this year.
What’s your favorite outdoor dining restaurant in NYC?
Fun question! I am a very new transplant here in NYC – just moved from San Francisco at the end of November to help open up Gainful’s beautiful new office near Union Square. So far, I’ve been enjoying an embarrassing amount of Vanessa’s Dumpling House. That’s my definition of comfort food!
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