- ECF campaign serves dual purpose marketing and fundraising strategy
- Switching focus to content model away from marketplace, expansion in the works
LAUNCHED two years ago, Malaysia-based health and wellness platform PurelyB is moving away from its original content-and-marketplace model to focus solely on content with a subscription model in the works. It is also currently in the midst of an equity crowdfunding (ECF) campaign on ATA Plus Malaysia with the aim of raising US$630,000 (RM2.7 million).
The campaign, which started on July 31 will run until Sept 3, acts as PurelyB’s pre-series A round. The startup previously closed a US$500,000 (RM2.1 million) seed round led by 500 Startups in Dec 2015.
According to the founders Jesrina Arshad, chief executive officer, and Stephanie Looi, chief operations officer, the main reason for PurelyB’s ECF campaign is to give back to the community that has been supporting the startup from the very beginning. Jesrina explains that PurelyB having built strong relationships with users the startup has also had requests from its users interested to become investors.
With ECF picking up in Malaysia this year, with each new campaign seeming to set a new record, the founders decided to launch the ECF campaign to mark the startup’s two-year milestone and as a thank you to its users. “Our strong community and loyal users are the reasons PurelyB has grown into what it is, and we knew this was a great way to say ‘Thank You’ and give them a chance to be part of PurelyB,” says Looi.
Read also: Signature Market attracts record 161 ECF investors
“It’s sort of a reward for sticking with us – they can join us as we grow and go regional, and at a price that’s still reasonable,” adds Jesrina. The share price has been set at RM23 (US$5.35) per unit.
[US$1 = RM4.25]
The investors will get not just equity but also rewards such as discounts on products and services that PurelyB launches (if they are already PurelyB members). Depending on how much is invested, investors can get up to 50% discounts for the soon-to-be-launched monthly subscription model that will include lifetime membership.
Confidence boost from RM1.3 million private round to existing members
PurelyB opened the ECF campaign with a private round for its members before opening to the public. The campaign raised RM1.3 million, which the founders say is an encouraging sign that the campaign could reach its goal.
The minimum amount for this ECF campaign was set at RM300,000. Jesrina explains that the range was set wide because the basic premise of the ECF campaign was not so much to raise funds but as a marketing strategy to expand PurelyB’s member base and get existing members to become owners of the business they are fans of.
“Once they are owners, there is even more incentive for them to share our story and what they like about PurelyB. So our thinking with the minimum goal was that even if we get 10,000 people who put in small amounts each, that’s still great,” she explains.
On a more practical note, the high goal of RM2.7 million was set for PurelyB to not only have achieved its marketing campaign, but to embark upon its growth and expansion plans as well.
Agility key to business success
The PurelyB founders have always believed that being agile is key to a successful business, as evidenced by its content focus and current fundraising/marketing strategy.
Jesrina reveals that in the past two years, the business was not focused on revenue but rather on building the brand and community, especially in the first year. “We knew that to be a trusted leading health and wellness brand, reputation comes first. If you try to sell immediately upon launch, it changes the way people perceive you. So we focused on content.”
PurelyB did manage to generate a little bit of revenue that first year through a wellness programme that users could buy on the platform; the programme was created upon request by several users. The platform’s core monetisation component – a marketplace – was launched as scheduled in June 2016, a year after the site launch.
Looi explains that because of the trust and credibility PurelyB built over that first year, it had no problems getting brands to collaborate and sell on its marketplace. Because these brands were carefully vetted by PurelyB’s experts, users knew that they could be trusted. However, as time went on, the team realised that users were using the marketplace more as a recommendation site than a store from which to buy the products.
Though the marketplace did generate some revenue for the business – Jesrina says during that time revenue growth was 50%-80% month-on-month – it was shut down after about 8 months of operation. She emphasises that PurelyB achieved about RM480,000 in revenue in those first two years of operation with very little spend on marketing – only RM5,000 per month.
“Coming from a content media background, we were new to marketplaces so we underestimated how much to spend on marketing our marketplace,” she says.
Jesrina does admit to PurelyB being cautious at that point: “We didn’t spend hundreds of thousands on advertising because we were still testing [the marketplace] out. We wanted to see what the response was like before going full-fledged. We were aware that to suddenly pivot after spending so much money and time would be really painful.”
The shift to focus purely on content happened once PurelyB realised that the content side of the business was the most profitable with the least amount of time and money spent on it, plus it was where PurelyB was providing most value to its users.
PurelyB is now turning its focus to a subscription model, which means that while there will still be free content on the platform, users can buy 30-day or 6-week video-based holistic health and wellness programmes specifically tailored to Asian cultures and lifestyles covering mindfulness, fitness, nutrition, diet and other areas that are designed to help them overcome specific health issues.
The subscription model will be fully launched in Malaysia in November and will be in Singapore, Hong Kong and Indonesia by the end of the year. PurelyB is in talks with potential partners in Indonesia who reached out to it, keen to form partnerships.
PurelyB already has a small audience in Indonesia, but Looi says that a strategic partnership will certainly help ease the way. “We are definitely more comfortable going into that market with a partner instead of just going in blindly.”
Further plans are to get into the Middle East, specifically Dubai, and Australia, though Jesrina says that PurelyB is keeping things flexible because the data gathered from the first expansion phase may indicate other more suitable markets to dive into.
She also reveals that because PurelyB targets a specific demographic of user, the content will all be in English, though there are plans to eventually provide the programmes in different languages if there is demand for them in the various markets.
“In whatever we do we always ask ourselves if we are addressing our vision, which is to help people with their health, and if we are solving a problem. If we are not, we should spend our time, effort and money finding something else that does speak to our vision and solves a pain point,” says Looi.
Making the future a reality
Health and wellness startup PurelyB raises US$500K seed funding
MyCash sets new ECF record in Malaysia with US$300k raised