Fertility or fertility funding/insurance-related companies?
March 21, 2022
by a searcher from New York University - Leonard N. Stern School of Business in New York, NY, USA
Hi Searchfunder community -- does anyone have experience with US fertility or fertility funding/insurance (see Gaia in the UK: https://gaiafamily.com/) companies? Pros, cons, challenges, market map, TAM, etc.
This is an area that I am (very personally) passionate about and would love to learn more if anyone has had acquisition experience in the space - particularly in the U.S.
Cheers,
Kristen
from Vanderbilt University in Denver, CO, USA
I can't comment on an acquisition angle, and that might be just of a lack of awareness on my part, but... I think it's largely because businesses of the type you're describing (fertility insurance/benefit, rather than provision) are largely still in the VC-backed startup space here in the US.
As I'm sure you know well, the insurance space is very different between the US and the UK - in the UK, the NHS covers up to two rounds of IVF, in most cases. As Gaia's website notes, there are problems with execution here (search "IVF postcode lottery" on google for more). Thus, I expect the market for Gaia is persons who are moving beyond those first two rounds (like Gaia's founder) or never got any coverage due to the lottery issue.
Meanwhile, in the US, fertility coverage is increasing, but is still typically only provided by larger companies who are self-insured. There are some ongoing efforts by a range of founders to create fertility/IVF-as-a-benefit companies, but they aren't stable, acquirable businesses, but rather VC-backed startups. Examples include Carrot Fertility, Progyny, Maven, and Mate Fertility. These companies aren't exactly what you've described (most are a roll-in benefit for providers, or use traditional financing arms for the patient directly).
That doesn't mean they couldn't be acquired, but given the VC model, you'd likely need either a lot of capital to buy out the VCs, or the company would need to be struggling and the VCs looking for a way out.
https://www.mercer.us/our-thinking/healthcare/new-survey-finds-employers-adding-fertility-benefits-to-promote-dei.html
from IE Business School in Cambridge, UK
As a caveat I have some limited experience in healthcare (and more recently employee benefits at a large company. I would note that from an insurance angle whilst this is a novel insurance product, it can easily be commodified and sold as part of a package deal in private insurance, so there are potentially lots of competitive pressures down the line.
From a fertility service provider perspective there is probably quite a lot more leeway as these services become more and more in demand.
Have you considered looking at adjacent industries as well eg case management and benefits brokerage?