Quick Pitch: Owlet (OWLT) Betting On A Turnaround In Baby Care
Quick Pitch: Owlet (OWLT) Betting On A Turnaround In Baby Care
Why this deSPAC caught my attention and why I think there's a play to be made here
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I thought long and hard about how I was going to share my notes on this company but frankly, the company is not hard to understand from both a problem-solving side and a growing addressable market. Two points I believe can make for a successful outcome, at least from the 50,000ft view.
Key Highlights
A deSPAC left for dead looking to finally inflect its business in the baby (health) care market.
The company is only one of just a few FDA-cleared medical devices allowed to sell with years of runway between it and its nearest competitor.
Strong word of mouth and organic marketing from happy parents (users) create a natural top-of-funnel customer acquisition for the company.
Recent international expansion more than doubles the addressable market.
Current capital structure is not ideal but for heavy dilution to occur, the current price needs to rise significantly.
We are long the company as a small, turnaround investment into the space.
Business Overview
Owlet (OWLT) is a company that sells FDA-approved baby monitors (Dream Sock / Baby Sat) that attach to your infant’s foot and continuously send you information — via phone app — to read and track your infant’s vital signs.
This is done by the hardware utilizing a pulse oximetry sensor which can monitor their pulse rate, activity, oxygen, and sleep patterns. The products you see below are their core product offerings that make up the entire business. Aside from accessories they also sell online, these are it.
Super simple.
The main difference between the Dream Sock and the Baby Sat is that the Dream Sock can be bought independently without needing a prescription (OTC), i.e. anybody can buy it. At the same time, the Baby Sat is a prescription-required medical device.
This is key because while they are both solving the same problem, the use cases are slightly different. After all, the Baby Sat is really for infants who are already at risk or currently diagnosed with a condition where the physician will want additional monitoring once leaving the hospital.