Exclusive: Sperm-focused fertility startup Legacy banks $25M

Legacy, the celebrity-backed sperm testing and storage startup, has banked $25 million in Series B funding, thrusting its valuation to $150 million, founder Khaled Kteily tells Axios exclusively.

Why it matters: Fertility has become a white-hot sector for venture investment of late, with backers pouring money into businesses tackling the financial and clinical aspects of starting a family.

• While many of those companies focus on women and their reproductive systems, half of all infertility cases involve problems related to sperm, says Sophia Yen, a Stanford clinical associate professor and CEO of women's telehealth company Pandia Health.
• "This is not just an issue that heterosexual women should be worried about," Kteily tells Axios.

Details: Bain Capital Ventures led the round and was joined by FirstMark Capital, Section 32 and TQ Ventures.

Driving the news: Several demographic trends are adding fuel to the fertility tech fire, industry observers and investors tell Axios.

• People choosing to have children later in life, making the process biologically more challenging and increasing the appeal of supportive technology.
• Decreased stigma around discussions about reproductive health, infertility and women's health.
• Employers increasingly viewing reproductive health tools as a core workplace benefit.

Context: The past three months have seen a rush of VC interest in startups offering everything from IVF financing tools to nutritional support and home hormone testing.

• Los Angeles-based Ruth Health and Berlin-based Apryl last month gathered $2.4 million and $4.3 million from venture backers in their respective geographies.
• Also in April, two San Francisco-based fertility startups pulled in fresh funding: Frame Fertility raised $2.8 million in seed funds and Future Family collected a $25 million Series B.
• New York-based Noula Health in March raised $1.4 million in pre-seed funding to offer a mix of virtual coaching and home testing products to birthing parents in English and Spanish.

How it works: Legacy offers its services both directly to consumers and via contracts with employers, insurers, the Veterans Administration and the military.

• For a full semen analysis, users order a mail-in test kit for $195, produce a sample at home and ship it back to Legacy's lab.
• The company also offers unlimited telehealth visits with urologists and fertility nurses and cryopreservation for between $100 and $150.

• In terms of order volume, Legacy is the largest sperm analysis and storage company in the U.S., says Kteily. "We are drowning in sperm."
• The company offers its services to anyone with sperm, regardless of gender identity, Kteily says.

One fun thing: Kteily's Instagram handle has long been @djnotkhaled, but he's been forced to rethink that since the real DJ Khaled has invested in his startup along with Justin Bieber, The Weeknd, and Orlando Bloom.

What they're saying: Investors and clinicians tell Erin they are pleased to see more of a focus on inclusive fertility efforts that bring men and people who identify as LGBTQIA+ into the equation.

• "Addressing infertility requires innovations that drive toward more inclusive — and ultimately more effective — family care," says Deena Shakir, a partner at Lux Capital who has invested in fertility companies including Alife and Maven.
• "I am heartened to see an increased focus on sperm health, especially efforts like this to make sperm preservation and testing more widely accessible — and also more widely acceptable," Shakir adds.

What's next: Legacy plans to use the funds to double its staff and launch a same-day service that lets people supply a sample and get results within 24 hours.