Heather Hasson was animated on our phone call as she described the fan mail she and her cofounder Trina Spear receive. As co-CEOs, they’re constantly getting letters from nurses and doctors about how their company has changed lives. “They wear their scrubs seven days a week, 14 hours a day,” says Hasson. “And they’re boxy and ill-fitting and scratchy.”
With over 19 million healthcare workers in the U.S. as of December 2017, Hasson and Spear are onto something big with their stylish, antimicrobial, odor-free and wrinkle-free designs. Film magnate Thomas Tull certainly thinks so. The founder of Legendary Entertainment, who had previously taken a stake in FIGS, is now a majority owner, injecting a further $65 million into the company, which aims to grab a chunk of the $50 billion in sales that the medical apparel industry rakes in globally. Tull has the time and some cash now, after having resigned from the film production company in 2017 and selling most of its stake to Chinese company Wanda Group.
According to data from PitchBook, only three other investments in female-founded companies last year exceeded the amount Tull is sinking into FIGS through his Tulco, a holding company with the mission of looking for companies in large industries that are ripe for disruption. This is the 11thbiggest deal for a U.S.-based, female-founded company since PitchBook began publishing its research in 2007.
FIGS isn’t the only company that is vying for a piece of the medical apparel market. Strategic Partners, a company that launched in 1995, has been selling in bulk to brick and mortar stores with little competition as incentive to change. A more recent entrant into the space is Jaanuu, which focuses on scrubs that look like they could have just come off a runway. Jaanuu was founded in 2013 by Dr. Neela Sethi Young and her brother, private equity investor Shaan Sethi.
Hasson, a former fashion executive, and Spear, who worked in finance at Blackstone Group where she became familiar with Strategic Partners and the medical apparel industry, saw a chance to innovate a sleepy market by using fabrics that were sleek, lightweight, and breathable and by selling direct to consumer, a model that was popularized by Warby Parker in 2010 and quickly spread across industries from shaving to baby clothes. They founded FIGS in 2013.
“We’re not just changing an antiquated industry, we’re changing purchasing behaviors that have been ingrained in this community for over a hundred years,” Hasson says.
Why should the doctors and nurses — who Hasson calls “incredible humans” — have to compromise when consumers in so many other categories don’t?
As part of the $65 million investment, Tull bought out FIGS’ other investors, including former Lululemon CEO Christine Day, executive vice president of the New York Giants and co-owner of Escape Artists Productions Steve Tisch, and actor Will Smith. “At this point, Tulco is the sole outside investor in the company,” confirms Spear. Buying out early stage investors is highly unusual. “Extraordinarily rare. Never seen it,” said Matt Murphy, managing director of Menlo Ventures. “If people like the company they won’t sell at this stage.”
Tull, Hasson and Spear are currently the only board members. It’s unclear whether there had been other board members before the buyouts.
Hasson and Spear see this new cash infusion, which brings FIGS total funding to date to $75 million, as a disruption in the venture capital model that requires founders to continually raise money.
“What this lets us do is not fundraise every year or two,” says Hasson. “We can really focus on building an iconic brand that not only changes how the business works, but how retail works in general.”
A key focus for the company going forward will be deepening their understanding of the customers and community. With predictive analytics, they can use data such as a customer’s income, geography, and job title to determine which uniform the website will recommend for them and customize their offerings. They can also identify new customers using this data.
“We’re able to look at billions of people – a ton of data from medical professionals all over the world – and figure out who’s not our customer yet and if they’re likely to buy FIGS,” says Hasson.
What’s next? Expanding into other verticals where uniforms are a requirement (think schools and the food service industry) as well as launching in international markets, says Hasson. “We have no plans to slow down.”