Musely secures $360 million in non-dilutive capital

Musely, a direct-to-consumer telemedicine platform, has secured $360 million in non-dilutive capital—a form of financing that does not require the company to give up equity ownership—from General Catalyst’s Customer Value Fund (CVF). The CVF is an alternative financing vehicle that does not take equity stakes and does not offer loans with interest rate charges. Instead, the fund’s alternative financing operates similarly to a revenue-share agreement, where companies borrow capital and repay it along with a fixed, capped percentage of the revenue generated from using the funds.

The company, which was founded in 2014 and pivoted to prescription skincare in 2019, has been cash flow positive for years, according to co-founder and CEO Jack Jia. Musely has been remarkably capital-efficient, having not raised a single dollar of equity capital since 2014, when it raised $20 million from investors including DCM. Because the company was already profitable, Jia was initially skeptical of traditional venture capital offers that would dilute his ownership. The new capital will be used to support customer acquisition, including sales and marketing, for its prescription skincare platform.

Jia noted that the decision to use the CVF was driven by the need to fund growth without the high capital burn typical of direct-to-consumer (DTC) companies. Musely has been growing its revenue on average 50% year-over-year. “When I mathematically modeled it, I found this absolutely compelling,” Jia said. He explained that scaling a DTC brand to a billion-dollar revenue company typically requires massive capital, making the CVF’s terms more favorable than a standard bank loan and less costly than a dilutive equity round.

Musely has served over 1.2 million patients, allowing them to access compounded treatments—customized medications prepared by pharmacists—through asynchronous consultations with board-certified dermatologists and OB-GYNs. Asynchronous consultations refer to medical visits that do not happen in real-time. By securing this capital, Musely joins a CVF portfolio that includes companies such as Grammarly, Lemonade, and Ro. The capital invested by the CVF was not included in General Catalyst’s last $8 billion fundraise, as the fund maintains its own distinct limited partners.

Why it matters

This deal highlights the growing utility of alternative financing vehicles like General Catalyst’s Customer Value Fund, which allow profitable, high-growth companies to scale without the dilution of traditional venture capital.