“I remember sitting in the atrium of St Vincent’s Hospital in Blackrock, in my scrubs…I was on a call with Greycroft and all the guys. Here we were with the business not functioning, everything closed, and raising money in a pandemic. It was a very tough, surreal, and bizarre experience, obviously at a very intense time.

“My colleagues there, all the doctors and nurses did a fantastic job in the circumstances. It was something I’ll never ever forget.”

Dr Brian Cotter is recalling his frontline experiences over almost four months since March as I chat with him and his fellow Sisu Aesthetic Clinics co-founders Pat Phelan and Dr James Cotter on a conference call. James also spent the same amount of time working at Cork’s Mercy University Hospital. 

Perhaps embodying the ‘Sisu’ Finnish concept of inner strength to a certain extent, there aren’t too many start-up founders who can say they dropped everything to help the HSE in its hour of need during a global pandemic, but some months later, it is evident that call was a productive one. 

This week the three Corkmen closed a series A fundraising of $5.5m (€4.7m), led by US VC firms Greycroft Partners – which backed actress Gwyneth Paltrow’s Goop brand – and Bullpen Capital, and plan to take on the States’ $5 billion market for their cosmetic treatments. 

New York will be their next port of call for the business that they founded in 2018, starting with two clinics. Phelan is waiting for a landing permit before relocating there for a number of months, where he will oversee hiring over 100 new staff and the opening of 20 new clinics by the end of 2022. The first one there should be open no later than February, he says. 

The Sisu founders previously spoke about wanting to be “the Starbucks of cosmetic treatments.” However, they have now set their sights on emulating US brands Warby Parker – a retailer of glasses and sunglasses that’s valued at about $3 billion, with about 100 stores across the US and Canada – and One Medical, a membership-based US primary healthcare provider valued at $3.6bn that floated on the Nasdaq in January.

PCH founder Liam Casey, along with Voxpro founders Linda and Dan Kiely also participated in the round, making follow-on angel investments. Sisu also has new backers San Francisco firm Mana Ventures, and the Gaingels Syndicate – an investment group that seeks to back the best companies with LGBT leadership that was founded by New York-based Irish investor and seasoned tech founder David Beatty.

The Cork trio now have eight clinics on the island of Ireland. The business is profitable, and has achieved annual growth of 300 per cent. The chain offers treatments such as anti-wrinkle injections, dermal and facial fillers, laser, teeth whitening, and more. They also offer bespoke package treatments that target multiple features and “face as a service” – a monthly subscription service for injectable ‘fillers.’. 

The business of beauty

While cosmetic and make-up brands have seen their sales slow because people are socialising a lot less since the Covid pandemic began, cosmetic treatment clinics have seen a rise in demand for their offerings, Brian explains.

“There’s a new cohort of patients, particularly for our injectable facials. They’re typically young professionals who have been working from home through the pandemic. They’re perhaps seeing themselves on Zoom calls. They might have observed characteristics of their face that they previously overlooked if they’ve been looking at the window with their own face on the Zoom call for eight hours a day,” he says.

Injectables will be the key revenue earner for the business. They’re relatively easy and quick to do, and they need renewing after a number of months, so it can be lucrative repeat business if you can retain customer loyalty, while opening up the potential to cross-sell other products as well. 

While its clinics’ doors were closed during lockdown here, Sisu boosted its e-commerce operation in order to sell more of its home self-treatment skincare products and teeth whitening kits.

“That kept three of us very busy, and we had to scale it up very quickly. While our clinics were closed, we had to avail of the government staff support scheme for some of our other employees. Selling those products, and we’ve two more on the way, meant that we could pay our rent and bills. Long-term it will be a €2 million or €3 million a year part of our business, but it will be a very small percentage of our overall revenues,” Phelan reveals.

When the doors opened again, they were fortunate that their treatment processes and the clinics’ layout largely lended themselves to the necessary Covid protocols.

They’ve now ruled out any UK expansion, focusing instead on a US rollout, with an eye on cities such as Dallas, LA and Miami after New York.

“People seemed to appreciate our doctor-led proposition even more. It gave them that bit more confidence,” says James. 

“Myself and Brian had obviously experienced the hospitals’ Covid environment, so we knew the measures we had to take and were comfortable with them. Primarily, you’d have one person doing a treatment, and no more than one other person in a waiting area at any one time.

“Over previous weeks, it was about getting everything stickered, painted, and protected, and then figuring out what reopening would look like in terms of customers and staff coming back, who came first and that kind of thing. That was a six-week process.”

Being disruptive, doctor-led and digital are at the heart of the business, the three co-founders emphasise, and if anything, the past seven months have strengthened their belief and renewed their focus and clarity as they set about the ambitious US plan.

“We’ve become more efficient, so we’re leaner, and the customer experience is actually better now than it was,” says Brian. 

Forget the UK, Sisu wants to own the US

While expansion into the lucrative US market has always been part of its plans, Phelan reveals that since he and I last met for a coffee in Cork last year in June, he and his co-founders have not only revised another part of their plans, but also have not needed to raise as much money as they previously thought.

“There’s no set brand in the US in our sector. It’s a confused market.”

At that stage, Phelan was in talks to raise €50 million, and came very close to venturing into the multi-billion pound UK market. He spoke about opening at least 20 clinics in London, and then cities such as Manchester, Newcastle, Leeds, and Liverpool. 

The trio made a number of trips across the Irish Sea to weigh up the market and view properties. But on closer examination, and in the wake of the effect of Covid, Phelan says that they’ve now ruled out any UK expansion for good, focusing instead on a US rollout, with an eye on cities such as Dallas, LA and Miami after New York.

“We looked into it extensively in Britain. But it’s a very saturated market. In the Northern cities, it’s very much a back street type scene, all based around price, rather than service. We came close to signing a lease in Liverpool, just off its main shopping street,” said Phelan.

“We are focused on an exclusive type of service rather than price. We are experience rather than price-driven. In London, which is a separate market really, it’s almost footballers’ wives, very overpriced, single name doctor clinics. Retail rents are high, and from a footfall perspective, the city is often pretty empty due to Covid.

“From a financial perspective, we discovered that we don’t need €50 million in funding. If we compare our Cork and Blackrock Co Dublin clinics, one has cost eight times less than the other. We thought clinics would cost between €400,000 and €420,000. But we didn’t know then what we didn’t know. 

“Our clinics in New York will be about 750 sq.ft [about the size of a small convenience store]. Covid has given us time to focus on all the numbers, our rents and fit-out costs, and to nail down exactly what we want to do there, what is performing and what isn’t performing. 

“There’s an opportunity now in the US, and a key strength is that we have a property partner there. Here in Ireland, we came through the lockdown period when our clinics were closed, and our two doctors were back on the frontline. All our bills and rent were paid, so we have a model that can tolerate stress, and we’ve come out the other side.”

Brian explains that there is a huge opportunity to stake their claim as a major player in the US with Sisu. “Warby Parker took an optician business, and changed the experience, setting a new standard, with only a slight difference in price. Their sales are over $350 million,” he says. 

“One Medical took a doctors’ practice and made it a membership-based private health offering using the digital and customer experience. It now has revenues of over $200m. If we perform as we expect us to, people will talk about Sisu in the same breath as these brands.

“There’s no set brand in the US in our sector. It’s a confused market. Transparency is low around pricing, expectations, and understanding. It doesn’t know who the market is. And globally, there’s no leading brand in the provision of facial aesthetics.”

It is a vision their investors share. “Having successfully backed Pat’s previous company, Trustev, we knew that the Sisu team was well-positioned to disrupt the US beauty market,” said Kamran Ansari, venture partner at Greycroft. “It has grown quickly in just two years and is poised to bring its incredible customer experience and unmatched transparency to the US.”

The funding will be spent on hiring new staff, marketing, and fitting out the new clinics, Phelan says. A CFO joins the firm on Monday from a large Irish and international brand, while he’s also seeking a chief marketing officer and head of acquisition and retention, as well as heads of Irish and US operations. 

Here in Ireland, Sisu has almost 50 employees, while US roles over the next two years will be in retail, concierge, clinic staff, and an increased executive team. Remote working for the time being means that there’s no need to spend a large chunk of money on leasing and fitting out a New York headquarters office, he adds.

Relocating to the US for several months seems not to deter Phelan in the slightest – thanks in part no doubt to his experience there with Trustev and then its acquirer Transunion – but it’s probably a move many people might think twice about in the midst of a global pandemic. 

“People have the impression I’m kind of a ringmaster, but I’m actually quite shy and solitary.”

Back in April, Phelan decided that he couldn’t just sit by and work solely on the business while the Cotters – and seven other Sisu doctors and nurses – were on their respective hospital frontlines.

He teamed up with Realex Payments founder Colm Lyon to source 300 hire cars and a number of shipments of personal protective equipment (PPE) for doctors and nurses who needed them in order to carry on doing their jobs.

“It kind of blew me away to see my colleagues go back to work on the frontline, and I wanted to give something back myself. It wasn’t a big thing. I still occasionally get thank you notes and letters about it. It was the nicest thing I’ve done, and the most rewarding thing I’ve ever done,” the 55-year-old father of two grown-up sons says.

The biggest challenge he encountered during the past seven months was “keeping our partners, investors and team members bought into the mission, and keeping that mission going. The key was information. I’m an oversharer, and when you give people the information they need, they feel more comfortable.”

“Fitness brings a lot of clarity. I don’t get tired or lazy. I don’t get the mid-afternoon slump that I used to get before.”

Pat Phelan

He found mainly working from home over the past seven months was enjoyable. “People have the impression I’m kind of a ringmaster or something, managing the whole show, but I’m actually quite shy and solitary. I’m actually comfortable on my own. I have a house that’s a bit too big for me and a big back garden, so I’m very, very fortunate in that sense.”

A keen angel investor in sectors he can easily understand – SaaS (software as a service), fitness and health – Phelan has backed a number of start-ups with small amounts of money, generally between €20,000 and €25,000 at a time, he says. Document sharing firm Docpack and healthtech firm Viv are just two of them. 

“Other than that, it’s mainly about whether I like the founder. That’s 90pc of how I assess them. I don’t always get it right. Three years ago, I was introduced to a founder of US credit card lender Petal, and they recently raised a $55m series C round.”

Having had a substantial windfall when he sold fraudbusting firm Trustev for $44m in 2015, the entrepreneur who also founded Cubic Telecom and sold it in 2012 is fond of the occasional treat.

He bought a Peloton bike a few months ago, and before that, upgraded his BMW X5 to the greener hybrid version. “I enjoy competing with others on the Peloton. My X5 might be the stupidest asset I own. It’s not like I’m doing much driving at the moment,” he deadpans.

Those familiar with Phelan’s story that he’s told a fair few times on The Late Late Show and in a number of other interviews will know of his past issues with alcoholism, which he bravely overcame. 

Any readers who are among his many social media followers will know that he regularly posts Instagram stories of his workouts or photos after using his Peloton. There’s a definite sense that fitness might be his addiction of choice these days.

“I’m no saint. I have a burger waiting for me here and a bag of sweets in front of me,” he laughs. “But absolutely it is, without a doubt. I like to think I’m in the best health of my life. Fitness brings a lot of clarity. I don’t get tired or lazy. I don’t get the mid-afternoon slump that I used to get before.

“This morning I would’ve burned 800 calories. I got back to one of the gyms here near where I live recently as well, now it has reopened. I like the push and the camaraderie – there’s a bit of that on the Peloton too. But because of Covid, you’re in a glass box at the gym. So it is a bit strange,” he laughs. 

“For the moment though, to have got this fundraising over the line is probably my greatest achievement.”