Meet the founder: Nutrition gets personal for Bioniq’s Vadim Fedotov

From high-tech platforms analyzing blood, stools and DNA to create tailored nutritional recommendations, to lifestyle apps deploying psychology to help users manage their food consumption, dietary advice is getting increasingly personal.

But how compelling is the business case for personalized nutrition? And is it a gamechanger that could move the needle on public health, or just the latest tech craze enabling a small group of affluent and highly engaged consumers get even more granular about their health and wellness?

From Viome, Baze, Rootine and Inside Tracker to Gainful, Ritual and Persona (Nestlé), there are now scores of companies offering personalized nutritional advice, foods and supplements, says Bioniq founder and CEO Vadim Fedotov. But creating a viable business model around the delivery of highly customized services is challenging.

AgFunderNews (AFN) caught up with Fedotov (VF), a former member of the German national basketball team, to find out how UK-based personalized nutrition startup Bioniq—which is backed by investors including HV Capital, Unbound, Rocket Internet, and Porsche Ventures— is approaching the market.

AFN: How did you come to create a personalized nutrition company?

VF: I grew up playing basketball and played for the German national team and the Buffalo Bulls in the US. But during my career, I had four torn ACLs [anterior cruciate ligaments] and four major knee surgeries, which exposed me very early on to medical rehabilitation and what it takes to optimize your health and get back in shape, but also showed me that professional sports is not a very long career.

So I switched professions and went to Munich to work in management consultancy, and then was hired to Groupon right before its IPO, so I was CEO of Groupon for Eastern Europe for almost five years.

When I reached my early thirties, I was not in good shape physically or mentally and I couldn’t work out how somebody with my background [in professional sports] and my resources could feel so bad. So I went to see a doctor that had been recommended and he gave me a blood test. I was expecting this holy grail experience and I remember walking in to get the results and he looked at me and said, ‘You’re fine. You’re not ill. If you were ill, I could prescribe you something, but there’s nothing to treat here.’

Traditional medicine will heal you once you’re ill. It’s not meant to optimize [your health]. And that was my A-ha! moment.

AFN: So what happened next?

VF: That was probably a year and a half before Bioniq existed, and it kind of set me off on a journey of researching professional teams and how they onboard athletes, looking at the latest trends in the health care and health tech market. I then met a medical director [Bioniq cofounder Dr. Constantin Karuzin] who had spent seven years in Switzerland doing clinical trials on how personalized micronutrients improve the cognitive and physical functions of professional athletes.

I read his research and it was so compelling that I decided to try it myself. After six months, I was able to understand what was going on inside of my body and the IP of that research we used as a foundation to create Bioniq in 2019 in London.

AFN: Even back in 2019, there were a bunch of personalized nutrition players. How did you plan to stand out?

VF: We have an internal [slack] channel called competitor updates and there are new companies [launching] every week. But the only company that we thought did something similar to us, we ended up buying [German startup LOEWI, which was spun out of the Technical University of Munich].

AFN: What biomarkers are important for personalized nutrition?

VF: We believe that blood is the best indicator, not just of your current wellbeing but also as a way of tracking trends over time. Genetics is great, but it’s chronic, so things will not really change. If I tell you [that based on your genetics] this is what you need, you can’t tell me three months later if it’s working or not.

Urine tests cannot do certain vitamin markers, you can’t do [determine your] vitamins [status] from hair, and the microbiome is [currently] fairly limited in terms of fully indicating what you might need [to optimize your health].

Based on 13 years of research [Dr. Karuzin’s research began in 2010], we believe that blood is the strongest indicator of trends and your body’s response to the solution [nutritional or lifestyle intervention] that you receive. Blood markers also indicate what your body can actually absorb.

AFN: What products is Bioniq supplying?

VF: [For the company’s more premium Bioniq PRO service] we combine blood testing with [sending customers] granules combining micronutrients and prebiotic fibers [guar gum, which has been shown to have prebiotic effects in some studies] such that you can take one scoop in the morning and one in the evening and cover your entire micronutrient needs.

This is instead of having 50 different bottles with pills [containing] gelatin or starch that can spike your insulin and aren’t personalized to you that you have to take throughout the day because you can’t take them all at the same time because they can block each other. We combine a personal solution with a form of intake that is convenient. It’s not just about me telling you what to do. It’s about me telling you what to do in a way that you want to do it and can do repeatedly.

AFN: How costly is it to produce customized nutrition like this to each individual client?

VF: It’s extremely challenging. We’re a premium brand because we only use Swiss manufactured granules for two reasons. One, because the clinical research was based on those granules; we have hundreds of participants over seven years to prove their safety and efficacy. And two, because in Switzerland, supplements [come under the] same regulations as pharmaceuticals in terms of quality, so our granules are pharmaceutical-grade.

AFN: How frequently do you recommend blood testing?

VF:  There’s a feedback loop. If I tell you that you need this, you are able to see [via a blood test three months later] if what we as a company stated has actually worked. Are our products being absorbed at the level that is needed to get into the optimal range?

 AFN: How are the blood tests conducted?

VF:  There are three different approaches. In the European market we’re sending finger prick blood tests to the user’s home. In all other markets, it’s a blood test where you either request a nurse to come to your home from a third party partner of ours in that market. And then the third approach is where if you already have a blood test, you can upload it. This is the approach I’m most excited about because [it’s way cheaper] and opens up global markets for us, because now, wherever you are in the world, if you have a blood test [you can access Bioniq’s PRO package].

We will then analyze the blood test and confirm that it’s eligible for our algorithm and we’ll then set up a consultation with a nutritionist. Afterwards, we’ll create a micronutrients mixture personalized to you. And you will never receive the same mixture again as a client because you’re constantly adjusting. Every three months we will adjust the batch according to your body’s needs.

AFN: But what if a Bioniq PRO customer doesn’t do a blood test every three months?

VF:  If you are a customer that doesn’t do a blood test for six months, but wants to stay on the supplements, we will predict what you will need without one based on data in our system, which now has close to five million data points from people from four continents.

AFN: But you also have a package that doesn’t require blood testing?

VF:  Bioniq GO [the basic package at $75/month in the US] doesn’t require a blood test, while Bioniq PRO [the premium offer at $150/month in the US] does. So if you subscribe to Bioniq GO, you fill in a 43-part questionnaire and our algorithm will compare people like to you to others that did a blood test, estimate what your body needs, and you receive a batch of three months [worth of customized supplements].

After this period, we’ll follow up with more questions. What changed? Did your sleep change? Did your stress level change? And then your next batch would be adjusted for that.

So Bioniq GO is a questionnaire-based product that predicts your [micronutrient] needs by comparing you to other people who actually did the blood test.

AFN: So what’s in the questionnaire?

VF: Our algorithm takes your personal information including your BMI, how big is your body, who are you age-wise, demographics-wise? We then look at your lifestyle in terms of how active are you, what line of work are you in? Where you live is also important because geography has an impact on things like your selenium levels. And then we look at your goals. Is it better sleep? Managing stress? Your looks? Do you have current or prior health issues we need to be aware of? It’s extremely detailed.

AFN: Tell us more about the dataset you’re interrogating to provide your recommendations

VF: Our algorithm is based on our proprietary client data, although we’re also pulling in data from scores of publications. As of today, there is no business in the market that does micronutrient testing on a regular basis as often and as much as we do.

Our starting dataset was seven years of data from Constantin’s [cofounder Dr. Constantin Karuzin] trials on how personalized micronutrients improve the cognitive and physical functions of professional athletes. So that’s 24 clinical trials with over 1,000 people. And it’s from that baseline we started. So because we had the clinical trials and publications, we already knew where our starting points would be.

AFN: Tell us about your progress to date

VF: Retention rates are the most important metric for any health business and we believe ours are market leading. We have datasets internally that show we have the highest lifetime value and highest retention rate in the industry given the size of the business.

AFN: How viable is your business model?

VF: Blood testing has horrible margins and it’s very labor intensive, so the biggest decision we made was moving away from providing blood testing from our side [and pushing the option for customers to upload their blood test results]. And since then, I think, because of the LTV [life time value], we are ROI positive in all markets, and on all products.

And in several markets, we are ROI positive on first purchase. So what that means is that the CAC [customer acquisition cost] is included in the margin at purchase and we’re profitable right away.

But as any startup founder knows, when you have a subscription product, the CAC comes out of your pocket right away and the quicker you grow, the more you have to put up money upfront, so you want to make sure that the terms allow you to retain the customer long enough for the person to see results. Once a client sees the results, they are more likely to stay.

Since we launched in 2019, we’ve had over 50,000 customers [he did not share a number for current users].

AFN: What kinds of clients is Bioniq attracting?

VF: There are three core consumers. Females 35+ interested in prevention and looking after themselves. Fitness enthusiasts who love their Apple watches and gadgets. And then you have the group of consumers aged 50+, where it becomes more of a longevity support system. So we have clients who are basically outsourcing their health monitoring to us.

AFN: Does the price point limit your potential audience?

VF: I think if people are willing to spend $100 a month on dried mixed vegetables that are not personalized, we’re definitely not pricing ourselves out of the market.

AFN: What things work best in terms of customer acquisition?

VF: From a market entry perspective, because it’s health related, you need to build trust so every time we come into a new market, we’ll partner with leading hospitals, medical care facilities, and professional athletes. One of our very first partners was Lanserhof, a partnership that really put us on the map.

For advertising, podcasts are one of the best channels. People who listen to podcasts want to be educated, they want to learn something new, and they have time.

AFN: Which geographical markets are you targeting and why?

VF: Our biggest market now is the US. Our second biggest market is Europe with Germany the largest market, then it’s the Middle East and the UK, our founding market.

AFN: How have you funded the business so far?

VF: We’re funded by some of the leading VC funds in Europe including HV Capital, Unbound, Rocket Internet and Porsche Ventures. When it comes to trying to raise money, the health tech and personalized nutrition sectors are very popular. What has changed is the risk ratio and the investment ratio. If three years ago, you’d get multiples on your revenue, now you’re getting multiples of EBITDA. It used to be a case of, it’s all about growth, let’s think about the burn later. Now, it’s like let’s think about the burn and figure out the growth once we’re profitable.

But what I can tell you very confidently, this period of time does two things. It eliminates the companies that don’t have a product market fit and it puts a lot of pressure internally on optimizing your structures and your processes.

AFN: What are your goals over the next 12 months or so?

VF: There’s going to be a very strong campaign to make Bioniq GO available on a global scale, especially in the US and Middle East. And second, [Bioniq is driving] the shift toward the blood test uploading capability so that the majority of our Bioniq PRO users upload their own blood tests.

We’ve also signed contracts with some of the largest laboratory chains [that do blood testing] so we see an expansion to [reaching] half a million users in a very short timeframe. That will allow the people who don’t do [the more premium] Bioniq PRO [package, which requires blood testing] to still still receive the majority of benefits [because Bioniq is able to improve recommendations for everyone based on blood data from customers signed up for the Bioniq PRO platform].

Further reading:

Bytes to Bites part three – Wellness wired: Leveraging AI to digitize nutrition and health