To enhance its application and reach more customers, Worklete is raising funds through a SAFE offering at a valuation cap of $30 million with no discount. This is a steep valuation, but the company’s level of revenue makes up for that extreme figure. Taking into account last year’s revenue, a $30 million valuation represents a revenue multiple of less than 10 times. As a result, Worklete’s price score is above average.

Worklete’s AI-based monitoring solution is perfectly-suited to giant companies like Nestlé with massive numbers of front-line workers. It has already established itself in a specific niche of the North American digital health market, valued at $39.4 billion in 2019 with an impressive CAGR of 31%. While monitoring patients with chronic health conditions counts for a considerable share of that market, the business-specific market is growing as businesses face growing pressure to care for their workers’ health. Similarly, the market size for occupational health and safety services in the US was estimated at $6.6 billion in 2021. While Worklete is targeting an admittedly niche market, there is much awareness growing around worker safety and health concerns. Balancing this market growth against the limited size, Worklete scores decently in the market metric.

As with athletic endeavors, Worklete draws strength from its leadership. For co-founder and CEO Benjamin Kanner, the company is a continuation of his family’s legacy. His father was an athlete who suffered from debilitated musculoskeletal injuries and conducted decades of consulting work with training firefighters, EMTs, and the like to develop strong movement habits. Kanner sees Worklete as a chance to scale up that good work with the power of technology. Kanner holds an MBA from Columbia University and he worked for more than 11 years with his father’s company, PSR Safety. He also worked in banking as an account executive in San Francisco and for Deutsche Bank-connected RREEF. Following his time with PSR, he spent a brief stint working with Rabobank on renewable energy and infrastructure before co-founding ChouxBox, a startup streamlining invoicing processes in hospitality industries. Having covered all the appropriate bases, he was well-positioned to start up Worklete in late 2015 with co-founder John Leo Post.

Co-founder Post is Worklete’s head of product. He also serves on the board of StandUpKids, which aims to provide standing desks to public school children and promote healthy habit formation even earlier in life. Post holds a Bachelor of Science in international business from Florida State University and is an expert in human movement. Following stints in management of entertainment properties in Florida, New Zealand, and Australia, he spent a few years engaging in volunteer and non-profit work while coaching San Francisco CrossFit. He is young enough to have recently been immersed in some of the most up-to-date athletic and fitness training, and his influence can be seen throughout the company’s ethos of training workers to move like athletes.

CTO James Rowley is a more recent member of the team, having joined up in late 2019. He got his start with Siebel Systems, which was eventually acquired by Oracle after his time there. He spent several years as the senior vice president of engineering for IBM, QRS, and Pure Digital Technologies, which would eventually be bought by Cisco. Since then, he has migrated across a number of advisory and interim positions before landing as vice president of engineering at Gliffy, a startup which was eventually acquired by Rogue Wave Software (which itself was then acquired by Perforce Software). 

The Worklete team brings a strong mix of fitness expertise, managerial skills, and entrepreneurial experience. The company’s team score is very high in reflection of its co-founders professional records.

Worklete sees itself in competition to post-injury treatment companies like SWORD Health and Atlas Consultants, which to a certain extent is true. Worklete’s strength over these companies is in its emphasis in preventive practices, which represents a strong differentiator. In its orientation towards frontline work it also sets itself apart from more traditional white-collar ergonomic suppliers. There are larger companies like Apple and Google with presences in the digital health market, though these are currently limited to business-to-consumer (B2C) products for self-monitoring by consumers. Should they decide to migrate to Worklete’s business-to-business (B2B) worker injury prevention space, however, it would not be challenging for them to do so as Worklete holds no protective patents. However, at this time Worklete stands out from its most direct competitors. Thus, the differentiators score for the company is strong.

Due to years of steady growth over time, Worklete has earned a stellar performance rating from KingsCrowd. In the last year, Worklete cut its long-term debt by exactly 40% from $2 million to $1.2 million. At the same time, it grew revenue from an already-stellar $2,428,153 to $3,084,482 with a $105,588 increase in cost of goods sold (COGS). It has also seen great success in prior fundraising, including $6.5 million in a Series A raise in 2018. Outside of its financials, Worklete has also demonstrated outstanding traction with customer retention of 80%. 

As a well-established startup with significant recurring revenue, Worklete is less of a gamble than usual. The product itself has been proven popular among workers, and while the market is full of competitors, Worklete remains differentiated enough that it isn’t an overwhelming concern. Worklete’s biggest concern for investors at this point is its debts, which are significant. The company’s short-term debt has risen from $2,562,230 last year to $2,788,535 this year, no doubt reflective of its necessary slowdown from COVID-19 lockdowns. Given that Worklete’s overall liability is going down, however, and it continues to take in steady revenue, there should be less concern even about these otherwise alarmingly-high liability numbers.

While Worklete has proven that its product and concept fit the current market moment very well, wise investors look to the future. With no patent protection and little product defensibility, Worklete needs to continue expansion of its customer base to pay down its massive debts while continuing to develop the platform itself to stay ahead of the curve. Taking on significant liabilities are a part of almost any startup, but this is an uncomfortable position to be in during this stage and is likely to remain a significant concern for the business for the next couple of years at least.

Worklete’s targeting to the underprivileged portions of the workforce has been paying off with just what investors like to see: steady growth. Despite significant potential challenges from emerging competitors, if the company remains on track with its customer growth, revenue should jump far more significantly this year to a target of $5 million. That could go a long way towards paying down some of that debt, and further growth as the economy rebounds from COVID-19 could push profits even higher, faster. The company is led by experienced and savvy founders, which further buoys the likelihood of success. All in all, the company is well-positioned for further growth and expansion.

Worklete is offering America’s frontline workers the training and monitoring afforded to venerated professional athletes through an AI-supported smartphone system. The product is specifically geared to blue-collar workers that spend most of their time conducting physical labor, at high risk of musculoskeletal injuries. Through machine learning and worker training, the platform reduces incidence and severity of worker injuries, saving customers millions of dollars a year.

The company has seen significant and steady revenue growth over time and enjoys 80% customer retention. It is on track to see revenue exceed $5 million this year. However, lack of product defensibility and severely high debt of nearly $4 million are twin millstones that diminish the company’s future prospects. Despite these high liability numbers, the company’s excellent revenue growth, strong co-founders, and well-differentiated product reduce the overall risk that investors face with Worklete. Thus, Worklete is a Deal to Watch at this time.

For questions regarding the KingsCrowd staff pick or ratings for this company, please reach out to support@kingscrowd.com.

Analysis written by Benjamin Potts.