This sex toys company CEO partnered with a supermodel and became a media darling. Then it all fell apart


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Jun 29, 2023

This sex toys company CEO partnered with a supermodel and became a media darling. Then it all fell apart

In late 2020, the sex technology company Lora DiCarlo was on top of the world.

In late 2020, the sex technology company Lora DiCarlo was on top of the world.

Cara Delevingne, the model and actress, had just come onboard as a co-owner and creative advisor, a stunningly high-profile partnership for a sex toy manufacturer. The company website showcased photos of Delevingne poring over vibrator designs alongside the company's founder, Lora Haddock DiCarlo. On Instagram in August 2021, the model posed with Lora DiCarlo's $150 Sway vibrator nestled in a bouquet of flowers. Delevingne told Fortune in 2021 that Lora DiCarlo "was the only women-led and femme-focused brand in the sex tech space that is really pushing the conversation around sexual wellness for everyone."

The implication was clear: Sex toys were no longer a shameful secret that women should hide under their beds. They had become cool, chic, aspirational.

The deal with Delevingne was just the latest triumph for the company. But it would turn out to be the high-water mark. Today, that partnership is over—and the company itself has evaporated.

This past October, Lora DiCarlo's employees—including senior management—received text messages informing them that their positions were terminated, effective immediately. There were no severance payments, not even the courtesy of a final paycheck, and staffers were shocked to discover their health insurance had already lapsed due to nonpayment, an ex-employee told Fortune. The company's Bend, Ore., offices were quickly abandoned, and its website has disappeared.

It's a stunning fall from grace. Lora Haddock DiCarlo had been the subject of glowing write-ups and interviews in outlets including The New York Times, Men's Health, Glamour, Fast Company, Wired, and This American Life. Her flagship product—a high-tech "hands-free" $290 vibrator called the Osé—had landed a spot on Time's 2019 List of Best Inventions. Now the onetime media darling has disappeared from public view, leaving behind aggrieved ex-employees, disgruntled distributors, and unhappy customers. Eight former employees who spoke with Fortune describe feckless management that led to shoddy product development; a toxic work environment in which employees were sexually harassed; and financial mismanagement. (Haddock DiCarlo did not respond to repeated requests for an interview over text message and voicemail. Email addresses she had previously used appeared to be deactivated, and messages bounced back. Delevingne did not respond to multiple requests for comment via her representatives.)

For sex tech veterans, the company's demise did not come as a big surprise. With her Silicon Valley connections and Instagram-ready affect, Haddock DiCarlo presented herself in the mainstream press as an entrepreneur bent upon saving the adult industry from sexism and skeeze. But to those more familiar with the sector, much of her messaging seemed tone-deaf—as if she were unaware of significant shifts that had already happened over recent decades, with the rise of women-owned and queer-friendly sex tech.

Sex toys had already gone mainstream enough to be stocked on the shelves of Walmart, and the global sex toys market is expected to grow at around 8% a year to reach $62.32 billion by 2030. High-end purveyors such as Gwyneth Paltrow's Goop and Maude, a Brooklyn brand that the actress Dakota Johnson has invested in, sell elegant sex gadgets for hundreds and even thousands of dollars—but what most consumers want is an affordable, quality product that reliably provides them pleasure, not an expensive, aspirational conversation piece.

As for that high-tech toy Haddock DiCarlo was selling as the iPhone of sex tech? It turned out that the much-ballyhooed flagship product that had garnered so much praise for its revolutionary engineering didn't even exist as a purchasable product for most of the hype cycle. When it was finally released in 2020, reviewers and users panned it online.

In a world that's simultaneously entranced and disgusted by sex, Haddock DiCarlo was able to largely avoid close scrutiny of her story. But her groundbreaking feminist sex tech company turned out to be neither as groundbreaking nor as feminist as it claimed to be.

Telegenic, passionate, and eloquent, Haddock DiCarlo first drew national attention in 2019, when the influential annual consumer electronics showcase in Las Vegas known as CES rescinded an award it had given the Osé, citing a clause disqualifying devices deemed "immoral, obscene, indecent, profane, or not in keeping with CTA's image." In response, Haddock DiCarlo blasted off an open letter accusing the Las Vegas trade show of sexism.

"We don't hide what we do, and we firmly believe that women, non-binary, gender non-conforming, and LGBTQI folks should be vocally claiming our space in pleasure and tech—both of which are still heavily dominated by male CEOs and executives," wrote Haddock DiCarlo, who is bisexual, in a letter her company released to press outlets.

The letter, which went on to chide CES for prioritizing "booth babes" over female founders, was a huge success in terms of media coverage—far more effective at raising the company's profile than the CES prize itself could have been. "What's So ‘Indecent’ About Female Pleasure?" the New York Times asked pointedly in the headline of one article about the brouhaha.

CES reinstated the prize—and a year later, Haddock DiCarlo returned to Vegas a conquering hero, the star attraction of a dedicated sex tech section that had been created in response to her letter (and to all the press it garnered). By early 2020, Lora DiCarlo had raised over $5 million in angel investment and grants, an impressive amount for an adult company. By early 2022, that number had grown to $9.2 million.

Lora DiCarlo presented its devices as aesthetically understated and technologically cutting-edge: not the pink and purple jelly rubber rabbit vibrators immortalized in Sex and the City, but "biomimetic" devices that harnessed "microrobotics" in order to mimic human touch, packaged in sleek exteriors that would look at home in an Apple store.

The Osé, for example, was a bulbous gray dual stimulation device that combined external suction and an internal moving nub to mimic oral sex. Company lore had it that Haddock DiCarlo sketched an idea for the product on a napkin after a particularly mind-blowing orgasm.

I’d been intrigued by Lora DiCarlo since the CES open letter. But as a journalist who has covered the adult industry for over 15 years (and has worked as a consultant for other sex tech brands), nothing about the Osé, or any of Lora DiCarlo's other planned products, made any sense to me.

The Osé was hyped as a groundbreaking robotic toy designed to generate a "blended orgasm"—i.e. an orgasm generated by simultaneous G-spot and clitoral stimulation. But technology promising blended orgasms are nothing new: The classic rabbit vibrator is designed to accomplish the exact same thing. And anyone versed in sex tech could see that the Osé's design wasn't particularly novel. The external bit had an air pressure mechanism similar to products already on the market from Womanizer and Satisfyer; the internal portion possessed a moving nub that had been pioneered in 2007 by JeJoue. Was it new to connect these products into one toy? Perhaps. But the hype was vastly disproportionate to the technological breakthroughs on display.

In June 2019, I met Haddock DiCarlo for coffee while she was visiting New York. I’d expected a quick chat and a product demo, something that would give me a sense of how the product worked and what consumers could expect. Instead, I was given a pitch about Lora DiCarlo's feminist mission. When I pushed to see the prototype, I was told that a public display was far too risky—somehow, a product demo at a café on the Lower East Side would enable Chinese manufacturers to rip off the product.

As I left that meeting, I wondered, was there even a product to show me? It turned out there wasn't—at least until a prototype of the Osé was finally unveiled at CES 2020, a year after its splashy "debut" at the same trade show. Even after that official launch, it was still a few months before products were shipped to customers.

I was also puzzled by Haddock DiCarlo's suggestion that the industry she was seeking to disrupt was such a cesspool: The tacky, badly constructed, and sometimes dangerous sex toys that Haddock DiCarlo positioned her products against hadn't been a dominant force in the market for decades.

In the 1990s, it was a much different story. Back then many products were powered by alkaline batteries, and toxic, phthalate-filled materials like jelly rubber were commonplace. One major push for change came from feminist sex shops such as Good Vibrations and Babeland, alternatives to the seedy porn stores of yore whose rise signaled the mainstreaming of sex positivity. These stores put pressure on manufacturers to produce better products.

The industry's changes did garner some press coverage, but many mainstream news outlets were reluctant to take sex tech seriously as a business. Then came Lora Haddock DiCarlo, with her glossy image and the seductive promise of one product that would effortlessly deliver orgasms to anyone. Again, this is a claim that industry veterans, used to providing a range of toys for various body types, niches, and proclivities, would instinctively treat with skepticism.

But many of those who fell for Haddock DiCarlo's pitch—the media, the investors, bookers in the tech industry speaking circuit—wanted a simple, compelling story. They wanted to believe DiCarlo had the iPhone of sex toys, that it was possible to create a vibrator that would achieve the startup world's much-coveted "escape velocity," overtaking the rest of the industry. They bought into the notion that with enough media hype and investment, an outsider with no industry experience could transform an established sector full of small businesses into a profit-generating playground for a single unicorn.

As I dug more deeply into Haddock DiCarlo's background for a feature I published in Wired in 2020, I discovered more puzzling aspects to her story. Among the various credentials Haddock DiCarlo had claimed during her time in the media spotlight were that she was an engineer, a former naval nurse, and a a medical school dropout. But when I tried to verify these claims, it became clear that Haddock DiCarlo was actually a community college dropout with no engineering background to speak of. Other parts of her backstory seemed to be cobbled together from half truths: The California Department of Public Health confirmed that she was licensed as a certified nursing assistant from May 2008 through November 2010; the military college Norwich University confirmed that she attended the school for a single semester in the fall of 2009. These seemed to have morphed into the claim that she was a naval nurse. Haddock DiCarlo's LinkedIn shows a hodgepodge of assorted gigs: a job in medical administration at an Oregon immunology center, the executive assistant at a cannabis company, and the cofounder of a holding company. (When I interviewed Haddock DiCarlo for Wired, she reiterated the professional backstory listed elsewhere, but during the fact-checking process, a representative of the company confirmed that she had never attended Portland State, instead taking night classes at Portland Community College, and had never worked as a nurse.)

And the product her company was selling didn't live up to its hype either. Once the Osé finally landed on retail shelves in 2020, it was underwhelming at best: I personally found it uncomfortable, and when I watched an examination and tear-down of the vibrator by a sex tech product designer, it became clear that it was made of cheap parts, and was far shoddier than its near $300 price point would suggest. Calling its mechanisms "microrobotic" was a stretch, experts told me.

For users, despite the high price tag and promise of a universal toy that could unlock a revolutionary level of pleasure for anyone with a vagina, the Osé was a finicky product, unwieldy and sometimes even painful: As Mashable reported, "discovering what feels good with the Osé requires messing around with it while it's on inside you, and turning it on while it's even at slightly the wrong angle can be excruciating." At the online reviews site Product Hunt, the toy was widely panned, receiving an average of 2.2 stars out of five. Although the Osé 2 offered a slightly better experience, it wasn't by much: Google's collection of 300 user reviews landed the second-generation product an unexceptional 2.7 stars, with a plurality of reviewers awarding the product one star.

Still, the good press kept flowing. In November of 2020, The Cut pronounced the brand "really worth its salt," and expressed the wish that "everyone treat themselves with gigantic, beautiful, masturbation robots this holiday season." In April 2021, Lora DiCarlo launched a fundraising campaign on Republic, a platform that allows companies to pursue investment through a crowdfunding strategy, and raised $1.7 million from over 3,000 investors.

The first signs of trouble seems to have been in September 2022, when Women's Health Interactive reported that customers purchasing products directly from Lora DiCarlo were having issues with order fulfillment. Then, in early November, the website went offline. Vendors who’d ordered products from the company turned to Haddock DiCarlo's Instagram to beg her to return their money or at least respond to their emails. (Her Instagram has since been set to private.)

Even the company's investors seem to have been left in the dark: When reached for comment about the company's demise in January one investor, Patrick Spaulding Ryan, responded that "until your message just now, I hadn't realized that there was a shutdown. What a huge bummer." (Spaulding Ryan was the only investor to respond to my requests for comment out of 10 contacted.)

So what happened? In conversations with former employees and complaints filed with the Oregon Bureau of Labor and Industries, the same story has emerged again and again: a slapdash product development process, dubious business practices and spending decisions, a toxic work environment that led many experienced hires to quit, and even allegations of sexism and sexual harassment. What becomes clear is that the Lora DiCarlo that appeared in the press—a high-tech, woman-led, queer and feminist company—was never more than a façade. Within the company's Bend, Ore., office, a wildly different story unfolded.

Lora DiCarlo began with a sketch on a napkin, that much is true. From there, Haddock DiCarlo went on to enlist the angel investor Doug Layman, who had sold a company he cofounded, Kadix Systems. As an Oregon State University alum and donor, Layman got Haddock DiCarlo access to the university's Prototype Development Lab, where a team of grad students worked to develop a prototype device, and to help her raise money for the venture. From there, Haddock DiCarlo and Layman (who became both the company's CFO and COO) snapped up experienced professionals from both inside the adult industry and tech more broadly, with the promise that they were getting in on the ground floor of something truly transformative. Shortly before Delevignge came on board in the fall of 2020, the website listed a team of 25 employees. The following spring, the company publicly listed its valuation cap at $40 million.

But when employees arrived in Bend—often after relocating from other parts of the country—they were surprised to discover that, despite what they’d heard about Lora DiCarlo being a woman-led company, it was Layman who seemed to be primarily calling the shots. More surprising, several told me, was the gradual reveal that, as well as being the CFO, COO, and lead investor, Layman was also Haddock DiCarlo's boyfriend. (Layman did not respond to multiple requests for comment made via text and email.)

Evie Smith-Hatmaker, the publicist who engineered the CES open letter that landed Lora DiCarlo in the spotlight, said it was the secrecy that made it feel like a betrayal. "They didn't disclose their romantic relationship to us for months," she told me. "I actually figured it out by doing some Facebook stalking."

Several ex-employees—most of whom asked to have their names withheld out of a worry that their nondisclosure agreements would leave them vulnerable to litigation—described a toxic work environment where information withholding and manipulation were far more common than trust. "If it wasn't what Doug wanted he would find a way to basically destroy your ideas," says a former member of the Lora DiCarlo marketing team.

Industry experts hired by the company say they felt disrespected on a regular basis. "My breaking point was when we had our final meeting about which manufacturer to go with," says an early Lora DiCarlo employee. "What it should have cost to mass-produce the prototypes that we made and won all the awards [for] would have been like $60 per unit," she told me. That's a production cost that would have justified the product's nearly $300 price point. But Layman and Haddock DiCarlo pushed to get the manufacturing cost below $20 a unit, she recalls—"to the point where it was taking out important features for both doing what we said it does, and also safety."

Another sore point was the company's insistence on showcasing low-level female employees in media clips while hiding male employees with extensive product design experience who were deeply involved in the work from the press. "There's nothing wrong with saying, ‘Hey, we’re designing products for women,’" said a male ex-employee. "But…there were three experienced men working on the products," men whose contributions were frequently erased in service of a narrative of "female empowerment."

And despite Lora DiCarlo's branding as a feminist, consent-focused company, there were multiple reports of inappropriate behavior and harassment within the office. "I would have used, not-clean sex toys from my manager on my desk when I’d come in for work," recalls Ada-Rhodes Short, formerly the company's senior mechatronic design engineer.

Other employees confirmed that in the company's early days, it was typical for managers to test the company's products on site at the office, and that employees were expected to act as product testers and were asked to share test units with one another, rather than being provided their own clean, new units. (This is not considered good practice in the industry; most other sex toy companies do not do product testing in-house, since outside testers are able to provide a more unbiased perspective, and requiring testers to share devices is frowned upon for both tester comfort and health and safety reasons.)

Several civil rights complaints have been filed with the Oregon Bureau of Labor and Industries, and remain open and under investigation. I obtained one of these complaints, which describes a work environment where employees of color were belittled and harassed and working mothers were disproportionately targeted for criticism. Haddock DiCarlo denied these charges in her responses to the complaints, according to Oregon Business.

Other complaints obtained by Oregon Business echo the charges of sexism and sexual harassment. Haddock DiCarlo is accused of disclosing inappropriate details about her sex life to employees and of disrobing before an employee in a shared hotel room and asking them to touch her naked body. Haddock DiCarlo reportedly denied the allegations, acknowledging only in her response that "[t]he nature of the business also requires discussions related to sex or [that] are sexual in nature."

Unsurprisingly, many employees left the company soon after they arrived in Bend. The engineers who originally designed the Osé were gone by the time it landed on shelves. High-profile hires such as the retail marketing manager Ian Kulp—a veteran of the Museum of Sex, Estée Lauder, and Alexis Bittar—lasted just over a year. (Kulp was reached over Instagram but never agreed to a formal interview.) "Being able to just burn that much goodwill and talent is an impressive level of fucking up," said the early team member.

And while the company had world-domination aspirations, its revenue maxed out at a little over $7 million in 2020, and SEC filings show that the company ended up over $4.2 million in debt, as the company's spending far outpaced what it was bringing in. Though it's not fully clear where the company's money was going, the early employee listed a number of colorful company expenditures: a snowmobile "because it was too snowy to drive to the office," for example, or sponsoring a beach Baja racer car, "because it was Doug's friend." SEC filings also show a transfer of $2.5 million in equity-based compensation, which former employees said was part of the deal with Cara Delevingne—though Fortune couldn't confirm that.

Haddock DiCarlo seemed to be betting that continued press would amp up the company's revenue. But even the Delevingne partnership didn't actually do much for the company: "The online web sales were atrocious—I’m talking like one to two thousand dollars a day," says the former member of the Lora DiCarlo marketing team. "They expected to sell $5 million in web sales and break the internet the day they announced the campaign [with Delevingne]. I don't think they hit over $5,000."

By the fall of 2021, multiple ex-employees told me, Layman and Haddock DiCarlo's romantic relationship had ended, the company was restructured, and Layman had departed—a crucial staffing change that led Republic to withdraw the campaign and return investors’ cash. In the wake of her failed campaign, Haddock DiCarlo announced an intention to pivot to Series A investment, ultimately raising $1.1 million from a VC firm, Centauri Capital, and five individual investors. But even that influx of cash couldn't keep the ship afloat.

The exact specifics of Lora DiCarlo's demise—the steps that led Haddock DiCarlo to close up shop and ghost on employees, vendors, and customers—are known only to the founder herself, and she has chosen not to share them.

From the outside, there are multiple ways to see this cautionary tale: It could be a Theranos-like story of a glib founder who managed to generate massive media hype for a product that never really delivered on its promises; a would-be disruptor who underestimated the difficulty of upending a long established industry; or a huckster who used the sheen of feminist empowerment to obscure a murkier truth.

In any case, the promise of Lora DiCarlo—as an industry-changing unicorn that was going to get an expensive, high-tech sex toy into every bedroom across America and "close the orgasm gap"—was never tethered to reality. And so long as this newcomer remained attached to the idea of "disruption" rather than learning about the industry and its already changing norms, the project was doomed.