“Nobody wants IVF. They want a baby.” Claire Tomkins, Future Family

Of any sector in the health industry, none is more emotive than fertility. Recently, Octopus Ventures’ Future of Health pod has dived deep – and invested in – the “taboo” areas of health, such as sexual health, menopause and addiction. Now we are turning our focus to fertility. Here’s why. 

The global market for fertility is estimated to be in the region of $25 billion, a figure which is expected to grow as fertility rates decline. Between 2014 and 2019, VC investment in fertility-related startups increased 3.5x, totalling $2.2 billion over that period, yet this figure is dwarfed by the $22.5 billion of VC investment in digital health startups over the same time period (Pitchbook). Innovation in fertility has lagged behind other areas of healthcare, with options for those looking to conceive remaining expensive and often ineffective.

The past

Traditionally, the industry has been dominated by large clinics, offering similar treatments at similar price points. David Sable, a life sciences portfolio manager, is one of the thought-leaders whose findings form part of our deep dive. He’s identified multiple bottlenecks in fertility services in the US relating to access, cost of treatment and the lack of digitalisation and automation within the most basic procedures. The focus has generally been on IVF that places women at the centre of the process. “Men in white coats” have been the accepted interface for fertility treatment with lengthy, expensive and sometimes distressingly ineffective experiences as the norm. 

The future

A new generation of entrepreneurs is riding the wave of scientific and technological advances. Human egg development, artificial womb research, tissue freezing (ovarian and testicular), male contraception and machine learning for embryo selection are some of the areas of research set to change the face of the fertility sector over the next decade. Against this science backdrop, change is appearing prominently on the consumer-facing side. The mobile app and tracking space is represented by companies like Glow and Ava along with diagnostics like Modern Fertility and Adia. Kindbody and Future Family are bringing colour and accessibility to the market in VC-backable form, whilst the likes of Progyny and Storkclub are allowing employers including LinkedIn and Goldman Sachs to build fertility treatments into their staff benefits packages.

Funding flow

Clearly great strides are taking place in the consumer-facing edge of the sector. But while funds flow into these companies, we are also aware of a dearth of funding in the early stage science and engineering aspects of the field. Improved outcomes and a better customer experience are the ultimate goal, but achieving these will require investment to all links of the value chain. Our fund structure allows us to be one of the few who can invest in the university spinout, IP-rich companies that require particularly patient capital and extended time horizons. We’re also able to capitalise on our long-standing relationships with universities and angel investors. Investing in a field as specific and emotive as fertility requires significant domain expertise to understand the science behind the field and we’re excited to find a segment that plays to our strengths in this way.

“If the patients I treated were told that part of the treatment involved walking on broken glass, they would do it.” Aldo Mora Sanchez, Immune Compass

With one in six couples struggling to conceive, western sperm counts reportedly halved in the last 40 years and social change bringing the issue to individuals and same sex couples, the demand for good, effective fertility treatment is going to thrive. As with so many of the most challenging problems of the world, it is entrepreneurs who boldly seek to tackle them. The more we learn about the fertility market, the more committed we are to backing the teams who will make a difference.