ViSalus
| File:Vi company logo.jpeg | |
| Industry | Multi-level marketing |
|---|---|
| Founded | March 1, 2005 |
| Founders | Ryan Blair Blake Mallen CMO Nick SarnicolaCEO |
| Headquarters | , USA |
Number of locations | 2 |
Area served | USA, Canada, UK |
| Products | Dietary supplements |
Number of employees | 275 |
| Website | vi |
Vi (previously known as ViSalus Sciences) operates as an American multilevel marketing enterprise based in Los Angeles, California, with additional offices situated in Detroit, Michigan. The company is widely recognized for its Body by Vi 90-Day Challenge and offers a range of weight management nutritional products, dietary supplements, and energy beverages across markets in the United States, Canada, Italy, and the United Kingdom. Its flagship offerings include the Vi-Shape meal replacement shake alongside the Vi-Trim Clear Control Drink Mix, which together drive the bulk of its sales.
History
The origins of Vi trace back to 1997 when Nick Sarnicola and Blake Mallen established the company as distributors for The Free Network, LLC—a Troy, Michigan-based telecommunications MLM. After The Free Network ceased operations in 2005, wireless Internet entrepreneur Ryan Blair acquired Vi with financial support from private equity firm Ropart Asset Management. Sarnicola and Mallen continued their leadership roles as CEO and CMO respectively, while the company shifted its headquarters to the San Francisco Bay Area.
During the 2008 financial downturn, Vi faced near insolvency with debts amounting to $6 million. That same year, Blyth, Inc.—a multi-level marketing corporation specializing in home décor founded by Robert B. Goergen—invested $14 million to acquire a 43.6% ownership stake. By 2010, Vi had rebounded to profitability, generating monthly revenues surpassing $15 million. Blyth further expanded its stake to 57.5% in 2011 after injecting an additional $2.5 million.
In August 2012, Blyth intended to launch an initial public offering for Vi with a valuation up to $175 million; however, this plan was abandoned due to market volatility and a credit rating downgrade from Moody’s on Blyth. Despite experiencing audited growth rates of 450% in 2012—positioning it among the fastest-growing companies of comparable scale—Vi encountered allegations of artificially boosting sales figures by recruiting leading distributors who subsequently defected to rival firms.
September 2014 saw Vi transition into a privately held company through a founder-led management buyout from Blyth, which retained a minority interest of 10%. This deal relieved Blyth of a $143.2 million payment obligation stemming from the initial acquisition. At that juncture, Vi’s revenues and profits had diminished relative to their 2012 highs, with losses reported through mid-2014. Following privatization, Vi discontinued public disclosure of sales data.
Distributor enrollment reached its zenith at around 114,000 participants in mid-2012 but plummeted sharply to roughly 31,800 by late 2014; CEO Nick Sarnicola headed the largest distributor network responsible for approximately 74% of total company revenue. In response to persistent sales declines and legal difficulties, Vi reduced its workforce by laying off 87 employees in 2016.
Racketeering
In October 2013, charges were brought in U.S. Federal Court accusing Nick Sarnicola and Blake Mallen of violating the Racketeer Influenced and Corrupt Organizations Act (RICO) on behalf of Vi by orchestrating criminal activities including extortion against Fred Ninow and Ken Dunn of Ocean Avenue. Ocean Avenue—a competing direct-selling nutrition firm—asserted that Vi executives engaged private investigators Nathan Moser and Peter Siragusa to hire computer specialists who unlawfully accessed Ocean Avenue’s confidential data as well as information belonging to former Vi distributors who had joined Ocean Avenue in late 2012. These accusations were denied by Vi. In July 2015, both private investigators pled guilty to federal offenses receiving sentences ranging from one to three years; meanwhile, Carlo Pacileo, Vi’s security director at the time, was sentenced to three years’ probation.
Pyramid scheme
In 2012, CNBC analyst Herb Greenberg remarked that Vi operates in a "gray area between legitimate direct selling and pyramid scheme practices." The Southern Investigative Reporting Foundation released an investigative report condemning Vi's business approach and emphasizing the substantial financial risk for investors. In April 2016, a class action lawsuit was initiated in the Eastern District of Michigan against Vi and several top executives—including Robert Goergen Sr., Todd Goergen, Nick Sarnicola, Blake Mallen, and Ryan Blair—accusing them of racketeering and fraudulent pyramid scheme activities connected to the sale of distribution rights.
Robocalls
In April 2019, a jury awarded $925 million in a class-action case against ViSalus for placing millions of unlawful robocalls, with the compensation intended for qualifying victims. This ruling was subsequently affirmed by a federal judge in 2020.
Products
The core revenue stream for ViSalus comes from weight management offerings such as the Vi-Shape meal replacement shake, Vi Go Instant Energy, and Vi-Trim Clear Control Drink Mix. Other products include Neuro, an energy beverage, and Vi-Pak, an energy supplement—both created by Michael Siedman, a specialist in ear, nose, and throat medicine. These products are promoted primarily through the Body by Vi Challenge, a structured 90-day program designed to support weight loss and fitness objectives.
Locations
ViSalus maintains operations across 16 countries, including the United States, United Kingdom, Italy, and Canada. The company entered the UK market in 2013 before expanding into Germany and Austria in 2014.