Eargo and Hearx Merge to Form LXE Hearing, Reshaping OTC Hearing Aid Market

In a significant move that promises to reshape the over-the-counter (OTC) hearing aid landscape, Eargo and Hearx have announced their merger to form LXE Hearing. The consolidation of these two prominent players in the direct-to-consumer hearing aid market comes with a substantial $100 million investment from Patient Square Capital, signaling strong confidence in the future of OTC hearing devices.

Merger Details and Leadership Structure

The newly formed LXE Hearing brings together the strengths of both Eargo and Hearx, with leadership from both companies taking key roles in the combined entity. Nic Klopper, CEO and co-founder of Hearx, will serve as the CEO of LXE Hearing, while Eargo's interim CEO Bill Brownie will take on the role of COO. The executive team will be further bolstered by Seline Van der Wat and Brian Maguire from Hearx, along with Tim Trine from Eargo, all joining the C-suite of the new company.

Market Position and Product Portfolio

The merger comes at a time of intense competition in the OTC hearing aid market, which was officially created by the FDA's final rule in 2022. According to data from Circana, Lexie (a Hearx brand) held the top position as the number one hearing aid brand in the U.S. from August 2023 to July 2024. The combined company will leverage this market strength while also benefiting from Eargo's established direct-to-consumer model and recent product launches.

LXE Hearing's product lineup now includes a diverse range of OTC hearing aids, catering to various consumer preferences:

• Eargo SE: A canal-fit hearing aid
• Link by Eargo: Described as the first earbud-style OTC hearing aid with Bluetooth 5.3 capabilities
• Lexie's line of Bose-powered hearing aids, featuring in-app hearing tests for personalized adjustments

Financial Backing and Market Outlook

The $100 million investment from Patient Square Capital, which previously took Eargo private in 2024, underscores the potential seen in the direct-to-patient hearing aid market. This substantial financial injection is expected to fuel innovation and market expansion for LXE Hearing.

While specific financial details of the merged company are not publicly available due to their private status, the investment suggests a positive outlook for the OTC hearing aid sector. The market has seen increased competition and innovation since the FDA's 2022 ruling, with new entrants including major technology companies like Sony, HP, and Apple.