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The fertility business is booming as startups go after big profits in a $54 billion market, even as other healthcare companies slump

Rebecca Torrence   

The fertility business is booming as startups go after big profits in a $54 billion market, even as other healthcare companies slump
  • Fertility companies are thriving as the rest of the healthcare industry stumbles.
  • Kindbody has announced $125 million in funding this year and Progyny's stock is surging.

Many healthcare companies have seen their growth stunted by the market downturn, but fertility startups are defying the odds.

The startups are benefiting from a constellation of social factors. Demand for services like in vitro fertilization, or IVF, and surrogacy has been climbing for years as people have kids later in life and infertility rates increase. And despite the uncertain economy, people tend not to delay fertility care in the way they might put off going to the dentist, investors and analysts told Insider.

"If you get to a certain age, you won't be able to have kids ever," Scott Schoenhaus, a KeyBanc analyst, said. "You're not going to wait in a recession."

Fertility's ascent is projected to continue for many years, said Sarah James, the managing director of healthcare-services equity research at Cantor Fitzgerald. Globally, the fertility-services market will be worth about $54 billion this year and is expected to grow to $90 billion by 2027, according to estimates by The Business Research Company.

Investors are betting big on that outlook. Fertility-tech startups raised $854.5 million last year, according to PitchBook, even as healthcare funding plummeted.

Several big names in the industry have notched marquee rounds recently. Kindbody, which runs fertility clinics and partners with companies to provide coverage for fertility services to their employees, raised $25 million in May, just two months after landing $100 million.

The industry is faring well on the public markets, too. The fertility-benefits company Progyny has seen its stock soar by 29% this year, while the S&P 500 has risen about 12%. Progyny, which went public in 2019, exceeded analyst expectations for its profits and revenue in its first-quarter earnings, reported in May.

Fertility companies are "a very attractive asset for investors and for the payers, as they think about where they want to be positioned," James said.

Big returns

Progyny's success this year is boosting investor sentiment for private fertility companies, F-Prime Capital partner Carl Byers said.

"We've seen Progyny hold up as a public stock more so than other healthcare companies that have fallen away," said Byers, who's an investor in Carrot Fertility, a private competitor of Progyny's. "That provides financial cover for this sector, so it continues to be very robust."

The fertility industry includes companies that operate clinics to provide services like egg freezing and IVF, companies that run labs and tests, and firms that help people pay for the procedures.

Fertility care is expensive — a single cycle of IVF can cost $15,000 or more, preventing many people from accessing the services. About 2% of babies born in the US each year are conceived using IVF.

Many patients pay out of pocket because health insurance often doesn't cover the breadth of fertility services. Clinics get that cash directly, rather than seeking reimbursement from health plans, which tend to negotiate down the costs of services.

That model can yield hefty profits for fertility players, and investors have clamored to bet on all pieces of the industry.

Maven Clinic landed $90 million in November for its telehealth platform, which includes fertility care. The AI-powered fertility-tech startup Alife Health grabbed a $22 million Series A in March 2022. The fertility-financing startup Future Family nabbed a $25 million Series B in April 2022, while the fertility-benefits firm Carrot Fertility raised $75 million in Series C funding in November 2021.

Selling fertility insurance

Startups such as Progyny that focus on helping companies offer fertility benefits, rather than on providing medical care, can be attractive to investors because there's less risk involved. The startups get paid via contracts with employers and don't foot the bill for any emergency healthcare costs from pregnancy or births.

For employers, fertility benefits can be an attractive perk in a tight labor market. And some fertility companies are trying to stand out further by saying they can lower costs for employers.

Progyny, for example, encourages patients to make evidence-based decisions about their fertility care, which helps them avoid expensive emergencies like premature births. In an economic downturn, minimizing employers' healthcare costs becomes an even bigger selling point for fertility benefits.

On the other hand, fertility clinics face no shortage of patients willing to shell out, either out of pocket or using fertility benefits, to build their families. So while a startup may run up greater operating costs by providing fertility clinics, the potential returns look much greater, too.

For Kindbody, which provides both fertility insurance and clinics, "the dollar revenue and profit per procedure is going to be much higher, because you have almost the entire pie as opposed to just a slice of it," Cantor Fitzgerald's James said.

Full speed ahead

Fertility companies are capitalizing on the industry's surge to expand further.

Many fertility practices in the US are currently owned by private-equity firms — about 15% of fertility clinics were private-equity affiliated in 2018, per a Centers for Disease Control and Prevention report, and private-equity firms have made more acquisitions since then. Experts predicted the fertility industry will see further consolidation this year, including more clinic acquisitions by private equity and by some fertility startups.

Kindbody's founder and executive chairman, Gina Bartasi, told Insider that the startup is currently looking to acquire more fertility practices after buying the fertility-clinic network Vios Fertility Institute in February.

She said that Kindbody expects to achieve positive cash flow within months, before subtracting expenses like taxes.

Progyny CEO Peter Anevski said he's faced a lot of questions about patients or employers pulling back on fertility services in a downturn. After raising its full-year revenue guidance in May, Progyny projects it will rake in over $1 billion in revenue this year.

"That's one of the things that people often don't get — in this economy, with a potential looming recession, will people use the benefit? And the answer is they're using it, and they're using it more frequently," Anevski said.

Want to tell us about your experience with the fertility industry? Contact Rebecca Torrence at or through secure messaging app Signal at +1 423-987-0320.

Correction: June 12, 2023 — A previous version of this story misstated Gina Bartasi's title. She is the executive chairman of Kindbody. She is no longer the CEO.