All Hail Happiness: The Gen Z Buying Habit Coming to a Wellness Investment Near You
Gen-Z knows and cares more about their health and wellbeing than ever before. Because what it means to be “well” today is so much broader than fitness and nutrition – it’s about maximizing all areas of your life, including physical health, emotional wellness, job satisfaction, financial health, a sense of belonging, personal relationships, leisure time, and much more. It demands an ecosystem that’s unique to each individual.
So, the ‘million dollar question’ becomes: how do we prioritize and balance all aspects of our unique life to be healthy and happy?
Gen Z is leading the health & happiness curve
As an investor who specializes in the wellness economy, I feel an intense responsibility to find and back founders who are building clinically validated solutions that help answer that question. And with 91% of Gen Z experiencing physical or psychological symptoms due to stress in 2021, there’s never been a more important time to do what I do.
Arguing that today’s young people are more health-conscious than ever is fairly uncontroversial. And plenty of statistical evidence agrees:
- Millennials and Gen Z represent 80% of all gym-goers and account for 89% of total users of online or app-based workouts.
- Gen Z have increased their health and wellness spending by 5% compared with millennials.
- Gen Z drinks on average 20% less alcohol per capita than millennials did at the same age.
- With mental health becoming increasingly destigmatized, 37% of Gen Z say they receive therapy.
- The average human attention span has decreased to 8 seconds.
Drawing these strands together paints a complete picture of Gen Z’s attitude to health. Increasingly, physical health, mental health, wellness, and lifestyle choices all play equal roles in the pursuit of one ultimate goal: happiness. We call it “All Hail Happiness.”
What makes an attractive wellness investment?
In 2021, the oldest of Gen Z are in their mid-20s – and old enough to make their own buying choices. And in the last few years, the market has noticed. New mobile apps now help young people with everything from meditation and exercise to sleep and mindfulness. Heck, there is even a mobile app and an entire phone to help you spend less time on your mobile device. The pandemic has only accelerated this trend, with more people than ever seeking mental health support – and an explosion in direct-to-consumer apps offering ‘the answer’.
This convergence of consumer demand and technology makes 2021 a really exciting time to be an investor in the wellness space; however, I also see more things promising a silver bullet come across my desk than ever before. As an investor, the goal is to find products and technologies that will catch on, not just as a fad, but as a long-term company of consequence that positively impacts the lives of the next generation. To do that, I focus on three things:
- But really, does it work?
Whenever I look at a wellness company, my first question is, “does it work?” – where is your clinical evidence, where are your studies, what does the early data show, does this product actually make a difference to people’s lives, and would our LPs actually use this product with their athletes? – and does the science back it up?
Plenty of new wellness services are making up problems to solve and plenty more are trying to convince people they have problems they don’t. Some of these might catch on in the short term – but if an app doesn’t work, consumers will eventually call it a day. *Cough* *cough* crash diets.
- Does it give me time back?
Gen Z grew up in a world where everything is available at the click of a button – they don’t need to go anywhere, there’s no patience for inconvenience, and the important decision they make every day is how they spend their time. So, in order to make their lives as full as possible, they demand a connected, digital experience for everything they do. For consumers to really stick with a new product, it must be convenient and time-saving – otherwise, something else out there will win out.
- Is it good enough to stick?
Habitual users are a critical measure of an attractive investment. They’re the difference between a short-term fad and a company of consequence. Even if you only attract a small population of users, you can build a large and sustainable business if they use the app every day and swear by its success. It’s reimagining fandom for a new generation.
Breathwrk: Our most recent investment and a perfect storm for Gen Z
Looking ahead to 2021, brands are making the wellness wave increasingly inclusive – focusing on seamless solutions that can make a difference for as many people as possible. It’s why we were so excited to discover Breathwrk – a direct-to-consumer mobile app that offers guided, performance-based breathing exercises.
- It’s science-backed: Increasing research from major universities, like Johns Hopkins, are proving the effects of breathing on our mental and physical wellbeing. As a result, more and more people are adopting the practice. Breahtwrk’s expert-built breathing exercises are proven to reduce anxiety, increase energy, improve focus, and help you fall asleep.
- It’s efficient: breathing works in seconds and has measurable effects on the autonomic nervous system immediately, unlike meditation and other practices. Breathwrk has breath exercises as short as 40 seconds.
- It’s habitual: the app has built-in programs that help users adopt high-performance breathing habits to meet their unique individual needs across four categories: Energize, Calm, Perform, and Sleep. The app notifies users at points in their day when they need to stop and take a breath.
Breathwrk is at the center of every big-market Gen Z movement and hits on everything we look for when it comes to wellness investing. Having gone viral with the help of their “share a breath” feature on Tik Tok, which now boasts 2.3M fans, the app is organically impacting the lives of people everywhere, whether that’s their performance on the field or their sleep at night.
Right now, the wellness sector is one of the best (and most complicated) places for an investor. But with great portfolio companies like Breathwrk joining our family and a highly strategic LP base across global sport, media, and entertainment – with the know-how to validate products and services – Sapphire Sport is one of the most exciting places in the venture capital industry, sitting squarely at the nexus of tech and culture. Having started at Sapphire just five months ago, I’m thrilled to be building this franchise and couldn’t be more excited about our portfolio - one that will be critical to shaping the lifestyles and more importantly, the happiness of the next generation.
Disclaimer: Nothing presented within this article is intended to constitute investment advice, and under no circumstances should any information provided herein be used or considered as an offer to sell or a solicitation of an offer to buy an interest in any investment fund managed by Sapphire Ventures, LLC (“Sapphire”). Information provided reflects Sapphires’ views as of a time, whereby such views are subject to change at any point and Sapphire shall not be obligated to provide notice of any change. Nothing contained in this article may be relied upon as a guarantee or assurance as to the future success of any particular company. Companies mentioned in this article are a representative sample of portfolio companies in which Sapphire has invested in which the author believes such companies fit the objective criteria stated in commentary, which do not reflect all investments made by Sapphire. A complete alphabetical list of Sapphires’ investments made by its direct growth and sports investing strategies is available here. Various statements made by third party guests about Sapphire relate to the nature and type of management services provided by Sapphire and do not constitute testimonials to Sapphires’ investment advisory services and no inference to the contrary should be made. Sapphire does not solicit or make its services available to the public and none of the funds are currently open to new investors. While the Sapphire has used reasonable efforts to obtain information from reliable sources, we make no representations or warranties as to the accuracy, reliability, or completeness of third-party information presented herein, which is subject to change. Past performance is not indicative of future results.