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Natural Cycles, maker of a fertility app with regulatory clearance for use as birth control, raised a $55 million Series C led by Lauxera Capital Partners, CEO Raoul Scherwitzl tells Axios exclusively.

Why it matters: The fertility tracking market has seen mixed results, with slow but steady growth among a handful of companies and shutdowns among others.

Zoom in: Point72 Private Investments participated. The company also added a revolving debt facility from JPMorgan Chase.

Natural Cycles has been profitable for two years, per Scherwitzl.

The company is using the funds for product development and to improve the process by which users seek health care reimbursement for its birth control services.

What's next: Scherwitzl sought a Series C to bring in growth equity investors with IPO experience and to explore additional product areas the company could expand into, such as menopause and other areas of women's health.

"In two to three years, we'll be in the IPO zone," says Scherwitzl.

The company is "also in a strong position to make acquisitions if there's a technology we like that complements our roadmap," he added. 

Flashback: This is the company's first raise since 2017, when it collected a $30 million Series B led by EQT Ventures.

How it works: Natural Cycles' app uses data including the birthing person's temperature, menstruation regularity, and sperm survival rates to suggest days to have or refrain from sex to avoid pregnancy.

Founded by physicist couple Raoul and Elina Berglund Scherwitzl in 2013, Natural Cycles in 2018 received clearance from the FDA to market its app as a contraceptive — currently the only fertility tracker to do so. 

The big picture: Many fertility tracking companies are challenged by churn, wherein users abandon the tools once they get pregnant. 

Natural Cycles can retain users over time, as they switch from birth control mode to postpartum care and back, says Lauxera partner Samuel Levy.

"We have an ambitious and exciting roadmap where we're focused on helping women make decisions that help them improve their health," says Levy.

Between the lines: The app may be comparably effective to the pill if used properly, per a Natural Cycles-sponsored study published in the European Journal of Contraception and Reproductive Health Care. 

For every 100 participating women who used the app in a year, seven got pregnant — a lower figure than the "typical use" scenario for the pill, which leads to roughly nine out of 100 pregnancies annually.

Reality check: The Natural Cycles app is not a pill and contains no medication. 

It works to prevent pregnancy but only if its users behave according to its suggestions, like avoiding sex or using protection on specific days every month, taking daily temperature measurements every day, and accurately tracking menstrual regularity.

As a result, pregnancies can and do still occur among users of the app.

Threat level: Privacy concerns about period tracking have emerged in recent years, with the FTC last year charging period tracker Premom's developer with sharing users' health data with third parties including Google and two China-based firms.

Scherwitzl says the company prioritizes user privacy. "Whichever country has the strictest [privacy policy], we will comply with that one," he says. "That's our philosophy."

State of play: Relevant recent period tracking deals include...

Menstrual cycle tracking and reproductive health startup Clue last April closed an unlabeled $7.6 million. 

Period tracking app Flo in 2021 raised a $50 million Series B.

Women's health startup FemTec Health, which in 2022 acquired FDA-cleared fertility tracker Ava, began winding down operations last May due to troubles related to management and financing, Axios reported.

Exclusive: Fertility tracker Natural Cycles nets $55M, sees IPO on horizon

Founded by physicist couple Raoul and Elina Scherwitzl, the Swedish startup in 2018 got FDA clearance to market its app as a contraceptive.

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Health tech deals

Natural Cycles, maker of a fertility app with regulatory clearance for use as birth control, raised a $55 million Series C led by Lauxera Capital Partners, CEO Raoul Scherwitzl tells Axios exclusively.Why it matters: The fertility tracking market has seen mixed results, with slow but steady growth among a handful of companies and <a class="gtmContentClick" data-vars-link-text="shutdowns" data-vars-click-url="https://www.axios.com/2023/05/23/femtec-health-winds-down" data-vars-content-id="ad314de2-fe3d-4f18-8166-5fef19338e3c" data-vars-headline="Exclusive: Fertility tracker Natural Cycles nets $55M, sees IPO on horizon" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/2023/05/23/femtec-health-winds-down" target="_self">shutdowns</a> among others.

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Exclusive: Fertility tracker Natural Cycles nets $55M, sees IPO on horizon

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