To this day, reproductive care remains fragmented, expensive and inaccessible. A lack of solutions to solve these problems has led to the proliferation of startups attempting to plug care gaps.
After speaking with over 75 fertility tech companies and clinicians, we distilled a few points of advice for investors and founders in this space.
Setting the stage
A confluence of factors creates challenges for reproductive healthcare in the U.S. Struggling to recover from the COVID-19 pandemic, hospitals are facing increased pressure to cut costs. Obstetrics is generally not a lucrative line of business in hospitals due to relatively lower reimbursement rates and staffing shortages; thus, certain hospitals are shifting the volume mix to more profitable procedures (i.e. knees, hips and spines). Unfortunately, this puts obstetrics on the chopping block.
Although employers and health plans are increasingly subsidizing costs of fertility treatments, coverage is still insufficient. Among married women in the U.S. ages 15 to 49 with no previous births, 19% are unable to get pregnant after one year of trying. And 26% of women in this group have difficulty getting pregnant or carrying a pregnancy to term.
Many cannot afford the average IVF procedure cost of $15,000 to $20,000 for one cycle. Fertility services are usually not covered by public insurers either. Only one state Medicaid program covers any fertility treatment, and no Medicaid program covers artificial insemination or IVF.
“Even taking insurance out of the equation, fertility treatments in the U.S. remain more expensive than in many other countries. Anecdotally, I have seen a lot of families choose to receive treatment outside of the U.S. because of this,” said Dr. Kathy Ku, Stanford MD/MBA and digital health investor.
To make matters worse, around 18 million women of reproductive age live in locations without access to fertility care, and the overturning of Roe v. Wade could leave even more in a lurch. Closing clinics in about half of states will exacerbate the clinical supply/demand imbalance in the long-term.
“There are a lot of access barriers – limited insurance coverage, high copays, not enough clinicians, physical distance to points of care. On top of this, fertility care has separate challenges, given it is viewed by many as elective, leaving patients to pay for it almost completely out of pocket,” said Dr. Michael Solotke, an OB-GYN at Northwestern Medicine.
“Fragmentation of care is also a challenge,” said Dr. Siobhan Dolan, an OB-GYN and clinical geneticist at Mount Sinai Health System. “Infertility is often treated in private settings, so once a patient is pregnant, there is no simple way for prior records to be documented in the health system EMR where the delivery will occur. This can lead to medical challenges and adverse outcomes, not to mention a lot of burdensome record transfer.”
Compounding these factors is the fact that reproductive issues are steadily rising as more women are delaying pregnancy, with the new median age for giving birth at 30 years old.
The problem is widespread. So what is being done about it?
Fertility care landscape
Startups are swooping in with innovative solutions to tackle these long-standing problems, and the fertility tech market is heating up. A record $800 million was invested in 2021, according to PitchBook.
The market can be segmented into the following five categories: At-home diagnostics and tracking, digital-first care delivery and coordination, fertility benefits and patient financing, educational content and community, and provider enablement tools.
Global fertility market map
Note: This market map is not designed to be comprehensive, and many companies stretch across multiple categories.
At-home diagnostics and tracking: This category is about empowering women to manage their fertility from home. One subset of companies delivers home-based diagnostics, primarily hormone testing and semen analysis.
Many are female-oriented, such as Famlee Health, which provides nationwide fertility testing, telehealth and treatment, but increasingly companies are targeting men as well. This makes sense given male factor fertility is present in roughly 50% of cases. One such example is Legacy, which allows men “to test, improve and freeze their sperm from home.”
With the expensive costs of IVF treatment, conception aides can be a productive first step and alternative treatment path and option, such as IUI devices, conception cups and even devices that measure cervical mucus. Bea Fertility is providing another option for fertility treatment at home with its clinical-grade ICI device.
Digital-first care delivery and coordination: Fertility-treatment delivery spans a continuum of models bolstered by brick-and-mortar, hybrid solutions, and virtual consultation and coaching platforms. Care coordination is an important part of this ecosystem to help women navigate the complex treatment landscape. Frame Fertility aims to be women’s dedicated fertility and family-building advisor. It provides personalized plans and ongoing support.
Reproductive care ideally starts well before a woman is planning to conceive. Egg donation and freezing is an up-and-coming segment, especially as more women decide to delay pregnancy. Cofertility’s model enables women to freeze their eggs for free when they donate half of the eggs to a family that otherwise can’t conceive. It also provides support and education for everyone involved along the way.
Another company, Blooming Eve, is focusing on vetted affordable clinic partnerships and educational resources to increase access.
“We are streamlining the appointment booking experience for our users, and the lack of technology adoption from the clinic’s side results in customer dropout. If the user journey were more seamless, clinics would have more customers, and we would all win in the end,” said Anastasiia Timon, cofounder of Blooming Eve.
Fertility benefits and patient financing: Given the prohibitive costs of fertility care, there are many companies focused on building services to package up and sell to employers or health plans as a benefit to members. Some companies have developed innovative financing solutions to combat the opacity and economic barriers of fertility treatments. One such example is Sunfish, which offers low-rate financing options and financial advocacy for fertility treatments.
Education, content and community: While less often a standalone business model, startups focus on reducing information asymmetry through peer support communities, educational content and programmatic courses on reproductive health — think Rescripted or FertilityIQ.
Data analytics, AI and provider-enablement tools: Finally, an increasingly important segment has emerged around using AI to make better treatment decisions and manage back-end processes in fertility clinics. Life Whisperer applies AI on 2D embryo images to identify embryos that are most likely to succeed in IVF. Alife’s AI-powered platform streamlines the end-to-end IVF process for clinics, including optimizing dosing of FSH (follicle-stimulating hormone), grading embryos and performing multi-clinic KPI monitoring.
1. Pursue the direct-to-consumer pathway to unlock reimbursements down the road
Figuring out the right business model is hard, because the market is largely self-pay and many startups are struggling to obtain reimbursement for reproductive care services.
Launching with a DTC offering can be a great way to test offerings on payers’ target populations and prove the solution works before going B2B.
“The only way to get there is to take a step-based approach. Start with a DTC product that people are willing to pay for out-of-pocket – we’ve seen a lot of startups fail because they set their sights too quickly on reimbursement and can’t generate enough revenue from consumers to get them there,” said Brittany Hawkins, CEO of Elanza Wellness.
Gathering sufficient clinical and financial evidence to make a compelling case for reimbursement can take years. Gaining adoption from consumers paying out-of-pocket first is a more expedient way to demonstrate market traction while extending cash runway for early-stage startups.
2. Upskilling is critical for addressing the fertility supply-demand imbalance
Since only 40 to 50 new reproductive endocrinologists graduate each year, upskilling clinical talent is essential for addressing demand.
To that end, Mate Fertility offers a turnkey solution for OB-GYN clinics looking to upskill staff and introduce new fertility care services, while taking a commission on additional service revenue.
“By partnering with OB-GYNs, expanding our clinic count and maintaining clinical pregnancy rates around 20% above national averages, while providing access that is not only more geographically accessible, but inclusive and more affordable, we will continue to raise awareness and leverage growth for change in this industry,” said Traci Keen, CEO of Mate Fertility.
In addition to the demand and supply gap, digital health investor Dr. Anna Nakayasu shares that “the time it takes to get a referral is also inhibiting access. People should just be able to drop by a fertility clinic when they have any concern related to fertility.”
3. Embrace self-funded small and midsize employers as innovation partners
The SMB employer segment has been too often ignored. However, they can be early adopters willing to iterate with innovators along the way. Shorter sales cycles and the ability to “test and learn” are helpful features of these partnerships. Across the provider landscape, we can find examples of startups successfully approaching regional health systems that are agile and open to co-creating innovation solutions.
For example, Tia Clinic has partnered with Cedars-Sinai to expand access in L.A. Concurrently, patients get access to broader specialty providers for more complex healthcare needs outside of Tia’s scope, and there is shared data and integration between the two care providers.
Bundling services can be another way for companies to get their foot in the door with employers. For example, framing a solution as part of a maternal care bundle, rather than purely as a fertility benefit, facilitates integration with the broader suite of employer benefits.
With many employers pruning down their ecosystems of benefits and partners considering tough economic conditions, proving meaningful ROI is key. The question remains, with most employers re-assessing their benefits stack annually, will there be meaningful near-term ROI within the first 12 months?
4. Tailor offerings to each woman’s individualized needs
Women’s health is not ‘one-size-fits-all.’ Period. We believe the key is in creating ultra-personalized solutions that meet women where they are in their reproductive health journeys.
The industry also needs to do a better job disseminating that there are options outside IVF and providing the appropriate triage and conception recommendations. Furthermore, cultural sensitivity and competency becomes especially relevant when inequities are so pronounced within women’s health.
Tsafrir Kolatt, CEO of Fertigo Medical, a company that aims to increase IVF success rates through real-time, in-vivo monitoring of uterus readiness for implantation, emphasizes customization for women’s specific healthcare needs.
“Find unique methods that apply particularly to women, their anatomy, organs, morphology and treatment. Make the woman’s body stand in the epicenter of reproductive health medicine, minimize the side effects and maximize sensitivity to its unique characteristics,” he said.
5. Shift from ‘reactive’ to ‘proactive’ reproductive care
Most women right after college are not thinking about reproductive health in a meaningful way and don’t have access to the right resources. There are advantages to meeting women earlier in their reproductive journeys to allow for more planning and avoid the stressful biological clock.
“A lack of accessible, standardized proactive education and resources leaves even educated women unaware of their own reproductive health,” said Lauren Makler, CEO of Cofertility. “Cofertility is working hard to address this and to create a new kind of human-centered ecosystem for fertility care and third-party reproduction.”
Reproductive health should not be treated in a vacuum, but rather integrated into the broader preventative healthcare and maintenance plan.
“Once a person is pregnant, we should welcome them into the healthcare system as soon as possible – for education and prenatal care, if they want to continue the pregnancy, for high-risk obstetrical services, if that is what they need, or for abortion services if that is their path,” Dr. Dolan said.
We believe this ecosystem would do well to think more about offering holistic support services to meet women where they are.
About the Authors:
Dana Sun is a healthcare investor at OCA Ventures, a Chicago-based venture capital firm, where she focuses on Seed and Series A investments in digital health and tech-enabled services companies. Previously, she was a strategic finance associate at Genentech and healthcare management consultant at Accenture.
Ellen Bursey is currently completing her MBA at Columbia Business School, where she interned at OCA Ventures, Cofertility, and Google. She is also a Flare Capital Scholar. Prior to Columbia, Ellen was a management consultant at Kearney, specializing in their healthcare and life sciences practice.