How Oura’s rings found their way onto millions of fingers

Its business is booming as consumers look to take charge of their health

When Oura started out in 2013, wearable health devices, such as FitBits, were mostly the purview of fitness-neurotics. The company’s Finnish founders, however, had two convictions. First, that a ring would less intrusively yet more accurately monitor vital signs than a wristband, because of its closer proximity to blood flow. Second, that the devices could be used for tracking not just exercise, but a wide range of health indicators.

Its business is booming as consumers look to take charge of their health

Both beliefs turned out to be correct, and today Oura’s rings adorn millions of fingers around the world, including those of A-listers such as Kim Kardashian, a socialite, and Tom Holland, an actor. On September 3rd the business filed to go public in America, reportedly seeking a valuation of more than $16bn. In the nine months to June it notched up $1.2bn in sales, up by 74% on the same period a year earlier. Unlike many other buzzy startups seeking to go public, it is also profitable.

Oura’s rise was slow at first. In an interview with The Economist last month, Tom Hale, the company’s chief executive, recalls hearing time and again from would-be customers some variation of: “I love the idea, but it’s a bit big for me.” Biohackers and Silicon Valley nerds accounted for most of the early demand. Over time, however, technological advances, particularly around battery life, have allowed Oura to slim its devices down dramatically. “No one looks at this and thinks it’s a piece of technology anymore,” says Ben Wood of CCS Insight, a research firm. “It almost looks the same as my wedding ring.”

Part of Oura’s appeal also lies in its user-friendly app, which presents vast amounts of data in an easy-to-parse way. That allowed it to launch a lucrative subscription business in 2021 which today makes up a fifth of its revenue. For paid-up members, the app will give detailed analysis of their sleep patterns at night or stress levels through the day, and offer personalised suggestions to improve their habits. The number of subscribers doubled in the year to June, to 5m. About 85% stick around after 12 months—“better than Netflix or Spotify”, notes Mr Hale.

Oura has benefited from consumers’ growing interest in taking charge of their health, and greater willingness to spend money now to prevent or lessen illness as they age. A sizeable share of its business comes from Americans buying rings using tax-advantaged accounts for health spending, which have soared in popularity.

For now, the smart-ring market remains tiny. Of the major wearables categories tracked by IDC, a research firm, it is the smallest, with roughly 5m units set to ship this year, mostly from Oura, compared with 40m for wristbands and 160m for smart watches. But it is growing fast. That is attracting rivals, including startups such as Ultrahuman and giants such as Samsung. So far Oura has kept them at bay. But it would face a bigger threat if Apple, which leads the smart-watch market, decides to muscle in on its business.

Mr Hale remains confident that Oura’s head start—as well as its patents—will make it difficult to catch. “We’re the only people on the planet that can do this,” he insists. That is a big claim. Oura will be hoping it rings true for investors.