Sustainable Investing | since 1999 | audibene
Audibene - How a Startup From Berlin Revolutionized Hearing Worldwide
Adapting hearing aids online was considered impossible until audibene proved otherwise
Although nearly 500 million people worldwide suffer from hearing loss, selling and adapting hearing aids online was considered impossible. audibene founders Marco Vietor and Paul Crusius successfully proved the opposite — by carefully listening to their customers. Pioneering in a mostly offline market, audibene was the first online provider of expert hearing care, appealing to younger and more tech-savvy first-time users. Founded by the two WHU almuni in 2012 and acquired by Sivantos Group from Singapore only three years later, audibene (hear.com) is one of the global leaders in modern hearing care today.
“Ever since I was a kid, I’ve thought about business cases,” Marco Vietor once said about himself. Thus, his ears pricked up when his former roommate and fellow WHU (Otto Beisheim School of Management) alumnus, Paul Crusius, told him about an under-served, global market with a huge growth potential.
The two students met during an internship in 2002, while sharing an apartment in Berlin. Both worked as consultants in different fields, and occasionally brainstormed the idea of founding an internet company together. “We were surprised that the 50+ target group was still vastly neglected online,” Marco says about audibene’s early phase, “and therefore pondered over how to develop a proposition for this clientele and what topics the so-called ‘Silver Surfer’ might be interested in.”
Thanks to their findings, they soon had the answer: the World Health Organization WHO estimates that over 5% of the world’s population suffers from hearing loss. This percentage is expected to double by 2050 to over 900 million people. Yet only one-tenth of all hearing-impaired people are currently using hearing aids. At the same time, there was hardly any information available online regarding hearing loss and the products to help. “There have been huge breakthroughs in technology, why this voluntary deafness? we asked ourselves,” remembers Paul. “How can we address this obviously largely under-served market?” In 2012, Paul and Marco founded audibene as the first online provider of expert hearing care. The portal set out to offer qualified advice on finding the right hearing aid for first-time users, which were then fitted by local audiologists and delivered right to the customer’s door.
“There have been huge breakthroughs in technology, why this voluntary deafness?”
In retrospect, the business case was pioneering — in more ways than one: first, the audibene concept redefined the level of efficiency in a pretty fragmented market. It created an integrated online service experience with independent partner audiologists working in the field. Second, by spreading the word about hearing loss and innovations in the hearing aid industry online, audibene was lowering the inhibition threshold for potential customers. At the same time, they were transforming and developing a mostly offline market into an online business. audibene began changing lives at an exponential rate.
“We were approached by a striking number of customers that needed a device for the first time in their lives,” co-founder Marco Vietor remembers. “That might well be the reason why.” People were either too ashamed or too vain to wear a visible hearing aid or had just been made aware of their impairment by family or friends. To them, accessing information and receiving answers online made a huge difference and implied an advantage for audibene. It was fast, it was free and — most importantly — it was anonymous.
The start-up soon offered devices from all the leading manufacturers. But as not every model met every customer’s needs, consultations were intensive. “The two founders devoted an immense effort to understanding how to transform a basic interest into a real desire to buy, and how to lead the customer through the sales funnel,” Christoph Braun, Managing Partner at audibene’s early investor Acton Capital, remembers. “On average, one consultation takes 40 to 45 minutes,” Marco explained. But once the purchase was made, audibene took care of the rest, including health insurance paperwork, and organized the complex fitting process that requires an acoustician.
Through its extensive network of partner audiologists across the country, audibene hit on an easy-to-scale solution to the most complex part of the business: the final, individual hearing aid fitting process. The partnership was a win-win situation for both audibene and the local audiologists: audibene was able to offer a high-quality service on a nationwide basis while the partners gained access to a new group of customers, they would otherwise not have been able to serve on their own.
When Acton Capital invested in 2013, the audibene team had already built a solid network of manufacturers and independent hearing aid retailers throughout Germany. The company had just started internationalization in the Netherlands and was constantly over-delivering on all relevant key performance indicators. One of audibene’s recipes for success: it recruited its customers through elaborate online marketing campaigns and storytelling.
“Like no other, the team understood how sales and marketing correlate with storytelling.”
On average, the start-up’s customers were 10 years younger and more tech-savvy than in traditional offline clouds. Therefore, audibene used traditional media, Twitter, Facebook or Instagram as well as direct targeting. “Like no other, the team understood how sales and marketing correlate with storytelling,” Acton’s Managing Partner Christoph recalls. “They created great online content that showed, for instance, what hearing aids are capable of nowadays.” In a PR campaign via Bild.de, Germany’s biggest news site, people were encouraged to register for a free product trial. “Small, but aha!” the article’s headline read, “Looking for testers for mini hearing aids,” its subline. “Mini was the magic word,” Christoph explains, “It was crucial for audibene to demonstrate that hearing aids no longer resembled flesh colored butcher’s hooks.” “Thanks to product innovations in the industry, we were able to offer aids with amazing speech clarity and smartphone connectivity in a virtually invisible design,” adds co-founder Marco. “And for a reasonable price!”
audibene’s customer-centric way of thinking paid off. With Acton advising on its internationalization strategy and equipped with unique market know-how, the network, and the consumer insights, audibene soon became the leading European digital retailer for hearing aids, with a well-orchestrated multi-channel approach, a strong international footprint, and patented technology. “Most importantly, both founders understood the importance of building a world-class team very early on,” Christoph asserts, “laying the groundwork to successfully scale-up their business.” Soon, audibene’s team grew to 150 members, revenue continued to increase and unit economics constantly improved.
In early 2015, three years after its launch, the start-up became part of Sivantos Group, a leading global hearing aid manufacturer backed by PE-fund EQT. The two founders remained chief executives of audibene and its US brand Hear.com. Their prediction that the demand for hearing aids would continue to increase has verified. Soon, the devices will get even smaller. audibene’s co-CEO Paul Crusius is convinced: “In the near future, nobody will be able to tell if someone is wearing a hearing aid.”
Add to that the several socio-demographic trends in developed societies, and the company’s success story is bound to continue: aging, an extended work life and increased exposure to noise all result in a longer period of impaired hearing throughout life, with younger demographics (40+) being the strongest growing segment.
In 2019, audibene has partnered up with 5000 audiologists, brought in over $150 million in revenue with a team of 1000 hearing care experts in 11 markets and reached the highest customer satisfaction rating in the industry. For now, the company has identified Asia as its next potential market. As the local coverage of audiologists is less dense compared to Europe or the US, the company has developed a unique, patented remote fitting tool. “Hearing impairment is still stigmatized in Asia, but thanks to audibene this will eventually change,” Acton Partner Christoph prophesizes. “In the near future, all you will need is a Wi-Fi connection to buy a device in Mumbai and get it fitted in Berlin.”