In the past few years, the trend of companies looking to spare the customer the need to visit a clinic and directly market para-medical products has been accelerating. Are you in need of dentures? We will customize them for you online and send them directly to your home. Israeli company Upstep has become part of this trend, with a technology that enables custom orthotics insoles to be marketed online.
Upstep was founded by three siblings Limor, Aviad and Oren Raz. The three all worked at various times in the family owned company, Raztech, which was founded by their father and managed production processes for Chinese-based companies. Limor also worked at Bank Hapoalim in Internet and digital banking, Oren’s background is in industry and production and Aviad comes from the field of business development.
The decision to work together was taken before the choice to get into insoles. "We knew that we wanted to sell a product online that was not yet marketed on the Internet, and that we would have a real comparative advantage," Aviad recounts. "I have used insoles from an early age," notes Limor, "and I understood that it is impossible to purchase insoles on the Internet. More than 70% of Americans will suffer at some stage in their lives from foot pain, but only a third of them deal with it. There is a real feeling among customers that the process of purchasing insoles is laborious, with a lot of charlatans, they are expensive and in the end the product is not always of high quality. We said to ourselves, this is the product that we will make accessible to the public at an attractive price and without any risk involved."
From New Jersey to a factory in Rishon LeZion
In 2014 the Raz siblings were introduced by a supplier of orthopedic software to Dr. Philip Wells, a British pediatrician with an expertise in insoles. According to Limor, "he already recognized the need and was looking for someone like us."
The company got its start in 2017 with service launched in the US "In the first two years we characterized the product," recounted Limor. "We invested millions of dollars of our own and parents’ funds and established a factory in Rishon LeZion."
Aviad: "Before we began marketing, we undertook six pilots in Israel and the US, in which we invested funds in our customers, just so they would try this format of shopping and test our product. "
The process that the buyer goes through can be described as follows: at first the customers must respond to a questionnaire about their daily schedule and use of shoes. Then a package is sent to the customer’s residence for taking an imprint of the foot using sponge like material developed by Upstep so that the customer can remember the shape of their foot (Limor: "People like to see their feet."). The package is collected from the home and taken to a logistics center where it is scanned by computer. From the logistics center in New Jersey, the scan is sent to Dr. Wells in Britain and from there the technical information for the custom insole is sent to the factory in Rishon LeZion.
The foot imprint box to be replaced by smartphones
At $200 the cost is substantially lower than most of the competitors. In the future, the plan is to replace the foot imprint box with a scan of the foot using a computer or smartphone, making the logistical center redundant and shortening the process, and also opening up additional marketing opportunities.
"We are doing what similar companies did by taking an existing product and turning it into a top-quality product that is easily accessible along with good customer service," Aviad said. "Like Casper in the field of mattresses, that went public at a valuation of $600-$700 million or Smile Direct Club in the field of straightening teeth, and Glasses USA, where one of the entrepreneurs invested in us."
Company revenue is around $5 million. "We are still not profitable because we still need to invest substantially in marketing," said Limor. Up to now the company has been financed by its founders and from ongoing activity, and only recently Upstep completed a NIS 6.4 million crowdfunding campaign on Fundit. According to the siblings, the funding round was the largest on the Fundit platform. They are hoping that the next financing round will be from a private investment fund in a rapidly growing company.
In the future, the company’s founders hope to sell additional products for the foot ranging from preparations to personalized workouts. "We want to be the Amazon of the foot."
en.globes.co.il - on September 9, 2020 © Copyright of Globes Publisher Itonut (1983) Ltd. 2020