Fertility-focused technology is attracting an unprecedented amount of venture capital funding, but startups developing new reproductive treatments and diagnostic tools still feel ignored.
Infertility is a massive problem affecting 15% of couples of reproductive age worldwide, according to the World Health Organization. Studies show that the use of procedures such as in vitro fertilization, where eggs and sperm are combined in a laboratory, has increased dramatically.
The problem isn’t new, but it’s only in the last few years that venture capitalists have really turned their attention to startups that are working to address the problem. Last year, $823.1 million was invested in 90 deals globally, according to PitchBook data, an increase of 273.3% and 109.3%, respectively, over five years.
“The conversation around reproductive health has improved in recent years,” said Sasha Astafyeva, a partner at Atomico. “Social changes, such as people starting families later, have made it more socially acceptable to talk about infertility issues and the challenges people face.”
More startups are springing up to tackle infertility, but not all are getting the same level of interest from investors, particularly when it comes to alternative diagnostics and treatments.
This is the case for EndoGene.Bio, a Paris-based startup developing a test to diagnose endometriosis, a condition in which tissue similar to the lining of a woman’s uterus begins to grow elsewhere, potentially causing infertility. . The company is currently fundraising, and co-founder María Teresa Pérez Zaballos has faced obstacles when it comes to VCs.
“They have called us taboo technology, femtech, or they have told us that the market is not big enough,” Pérez Zaballos said. “[Investments] they are generally on the rise, but I feel like people are looking for quick and easy solutions; no one wants to take the risk. Infertility is still a very reactive field and we need more focus on prevention to solve it.”
Much of the capital invested in fertility is devoted to well-known, reactive medical technology such as egg freezing and IVF enhancements, according to Matthieu Vallin, an investor at Octopus Ventures. Part of the problem is that conversations about fertility often start too late, when people are already planning to have a child. This puts more emphasis on reactive treatment.
IVF has been around for decades and has a proven success rate for live births: about 55% for women under 35, according to the Society for Assisted Reproductive Technology. Backing startups that offer access to IVF or improve its efficiency by optimizing embryo selection or sperm count is less risky than investing in early-stage companies developing less-proven technology.
“We have to start looking beyond IVF,” Vallin said. “Many people are focused on fertility hotspots, and investments in preclinical and home diagnostics are being left behind. By focusing on [the latter]people can get treatment sooner and we can improve success rates without spending $15,000 per cycle.”
Supporting a medical startup in any field is risky. And, unlike an app or financial product, fertility startups face a greater regulatory burden and require a greater investment of time and capital. It can take a startup a decade to bring a product to market, which could deter investors.
Tess Cosad, co-founder of Béa Fertility, which is building a home intracervical insemination kit, found this challenging for investors.
“Investors were very open to what we’re doing, but it’s easier when it’s an organization that’s in financial services. [rather] than regulated medical devices that have clinical experiences,” Cosad said. regulated.”
According to Astafyeva, it’s less about the risk and more about addressing the most pressing pain points throughout the fertility journey.
Access is a big challenge for people struggling to conceive. Fertility is inconsistently legislated around the world and within countries. Even in some countries with public health systems, infertility is often underfunded because it is not considered a “life or death” situation.
This has led to high privatization and prohibitive costs for most. For example, a single cycle of IVF treatment can cost between £5,000 and £10,000 (about $6,271 to $12,542) in the UK, or up to $60,000 in the US, according to Octopus Ventures, no guarantee of a successful outcome.
While new technologies and preventative treatments can reduce long-term costs, there is an immediate need to provide access to fertility care. More venture capitalists are turning their attention to the space with investments in startups like UK-based Gaia, which offers a fertility insurance product using outcome-based pricing, and Carrot, which offers fertility benefits for employers.
“When I think of startups with the ability to have the most immediate impact and change the paradigm for so many people, it starts with access,” Astafyeva said. “We should be innovating across the spectrum, but right now a lot of people are being left out of treatments. Addressing that problem for me is a huge opportunity.”
Featured image by Hector Roqueta Rivero/Getty Images