All Access

Health Tech Deals

Health Tech Deals Alerts

Alert

Standard

Health Tech Deals Thought Bubble

Thought Bubble

mustard

BFD Expert Voices - Health Tech Deals

BFD Expert Voices

topics

politics-policy

epstein-files

donald-trump

2026-midterm-elections

immigration

behind-the-curtain

race-and-equity

technology

privacy-tech-regulation

automation-and-ai

tiktok-news

big-tech

social-media

cybersecurity

economy

social-security

inflation

tariffs

federal-reserve

jobs

transportation

business

stock-market-news

retail-news

crypto

media

elon-musk

dealmaking

health

rfk-jr

drug-prices

axios-explains-abortion

public-health

world

israel

axios-explains-ukraine

iran

russia

china

energy-climate

nuclear-energy

climate-energy-policy

climate-change

extreme-weather

alternative-energy

electric-vehicles

science

emerging-tech

biomedicine

newsletters

pittsburgh

atlanta

san-diego

charlotte

boulder

washington-dc

kansas-city

dallas

denver

detroit

des-moines

austin

boston

chicago

cleveland

columbus

houston

indianapolis

miami

nashville

new-orleans

nw-arkansas

philadelphia

phoenix

portland

richmond

salt-lake-city

san-antonio

san-francisco

seattle

tampa-bay

twin-cities

raleigh

huntsville

colorado-springs

axios-local

axios-pro

axios-live

the-axios-show

The funding frenzy for fertility tech has only just begun, as two reproductive health companies sewed a collective $6.7 million in seed funding today.

Los Angeles-based Ruth Health and Berlin-based Apryl gathered $2.4 million and $4.3 million from venture backers in their respective geographies.

Driving the news: Digital health investors are flocking to fertility tech like never before, pouring unprecedented amounts of capital into a sector that's been overlooked by mainstream backers for decades. Investors and analysts tell Erin:

People are choosing to have children later in life, making the process biologically more challenging and increasing the appeal of supportive technology.

Discussions around reproductive health, infertility and women's health are beginning to be destigmatized. 

Employers increasingly view reproductive health tools as a core workplace benefit.

Why it matters: Reproductive wellness is a core component of health care with impacts beyond children and their birthing parents, including their partners, adoptive parents, caregivers and employers. 

"The industry is finally catching up to the fact that this isn’t just a women’s issue," says CRV partner Kristin Baker Spohn, who previously invested in the startup Carrot Fertility. "And it's a tax on a woman’s highest growth potential, so we need better clinical care and infrastructure in place."

Details: Ruth offers consumers virtual care tools that span pelvic floor training, lactation counseling, C-section recovery and intimacy. Apryl offers employers tools that include lab testing, care navigation, fertility treatment financing and adoption support.

Ruth's seed financing was led by Giant Ventures, with participation from Citylight VC, Cleo Capital Scout Fund, Crista Galli Ventures and others, bringing its total raised capital to $3.1 million.

Apryl's seed financing was led by European venture firm Breega.

Context: The first quarter of 2022 saw a growth spurt for reproductive and maternal health startups. In April, the sector placed among the top six best-funded clinical categories for the first time since 2019 with a collective $424 million in funding, according to a recent Rock Health report. 

The trend was especially apparent in October 2021, when global investments in fertility tech rose 89% from the year before, according to Crunchbase.

"I believe the market is ripe for this," Shereese Maynard, a health tech strategist who focuses on women's health, tells Erin.

State of play: Companies in the fertility tech sector span a wide canal of services, from reproductive counseling and support to diagnostic testing and financial support.

U.K.-based Gaia in February debuted its personalized in-vitro fertilization (IVF) insurance product on the Lloyds of London market and raised $20 million in Series A funding.

San Francisco-based Frame Fertility this week raised a $2.8 million seed round to offer its virtual care tools to "anyone who might want kids," including people who identify as LGBTQIA.

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.

San Francisco-based Future Family this month raised $25 million in Series B funding to offer birthing parents both financial and virtual care support.

Be smart: Most businesses in this sector offer their services through employers, who investors say have been early adopters of the tools, as opposed to consumers, who would either have to pay out of pocket or attempt reimbursement with insurance, which rarely covers infertility treatments.

"Employers think of it as total rewards rather than health and benefits," Baker Spohn tells Erin. 

The other side: The fertility tech industry is still potty training as it reckons with sizable challenges such as the U.S. health care system, where a fee-for-service model tends to incentivize people to wait until they are actively trying to conceive to get help, as opposed to opting into early-stage family planning or preventive care.

"Thinking preventively about fertility is not intuitively how people or the medical system treat it currently," says women's health investor Leslie Schrock. "It should be the standard of care but is going to take a lot of time to educate people."

1 big thing: Fertility startups sew $7M seed as baby funding booms

Illustration of a baby onesie printed with the image of a $100 bill.

Auctus Capital Partners is gearing up for a sale of PharmaLex Group, a Germany-based global pharma services platform, four sources tell Sarah. 

Why it's the BFD: The rapid development of new therapies and their increasing complexity, along with the shift to more targeted drug marketing spend, is driving up demand for pharma commercialization and clinical development services.  

Investors are eager to get in the space and likely to its benefit,  PharmaLex is one of few scale opportunities currently available for investment.  

The other big commercialization deal brewing is Amulet Capital's Open Health, whose sale process is anticipated to launch next month, Axios wrote previously.

Elsewhere, sources say the Jefferies-run process for Genstar Capital's Advarra — the country's largest institutional review board — kicked off earlier this month. 

What's happening: Harris Williams is engaged to advise Germany's Auctus on a potential sale of PharmaLex. The timing of the process is not clear.  

PharmaLex’s LTM EBITDA is in the mid-60 million euro range, whereas forward EBITDA is about 70 million euros, sources say. 

Baird was hired in 2018 for a potential sale, but the company ultimately did not come to market, sources say. 

Zoom in: PharmaLex, with over 1,700 employees worldwide, offers various specialized services to support pharma, biotech and medtech companies through the full product lifecycle. 

That includes offerings that support strategic planning activities and non-clinical requirements, to clinical development, and ultimately through regulatory submission processes, market approval and product maintenance post-launch activities. 

The big question: How integrated is the platform given how many acquisitions it has made? 

By PitchBook's count, at least 23 acquisitions have been inked since October 2015, and the platform has 12 subsidiaries. That includes four acquisition announcements already this year.

In March, it merged with Italy's EBMA Consulting, and in February, it merged with Tokyo's Ascent Development Services to expand its reach to Japan, East Asia and Southeast Asia. 

What we're watching Value expectations are not clear, but relevant assets have been trading at multiples in the high teens to 20x-plus EBITDA range. (If consistent with those trades, we're talking a 1 billion euro-plus deal.)

Global or European sponsors are likely acquirers, but expect PharmaLex to garner interest from U.S. buyers as well, sources say. 

Auctus, PharmaLex and Harris Williams did not return Axios' requests for comment. 

2. The BFD: Auctus readies PharmaLex sale

Illustration of falling pills surrounded by abstract shapes and sections of dollars.

SoftBank-backed Big Health is partnering with CVS to launch a new medication targeting program to drive greater access to digital therapeutics for mental health and insomnia, the company tells Sarah.

Why it matters: Underscored by the pandemic, mental health treatment faces a big volume and scale challenge.  

By targeting the patients that have already sought help and are receiving prescriptions, Big Health unlocks a greater opportunity to reach individuals with a third, safe option for treatment, CEO Peter Hames says. 

State of play: Prescription usage is high-risk, but on the rise, whereas there's a large shortage of traditional therapists. 

Because it is often the only available solution, 82% of mental health patients are treated with medication.

"The pandemic has highlighted how inadequate the traditional modalities of care are in tackling that problem," Hames says. "[Big Health] combines the safety and effectiveness of human therapy with the scalability and accessibility and equity of drugs." 

How it works: Anyone who's filling a mental health prescription through CVS Caremark will now have an option to access Big Health's two digital therapeutics, which are offered via the smartphone.

That includes Daylight, which treats anxiety, and Sleepio, for insomnia. 

Hames says this essentially lets Big Health, with the consent of the plan sponsor, to automate member outreach in real time. 

"We're using that prescribing event as a trigger, but we don't have to change the behavior of the prescribers," Hames says. "We’re not getting in front of the drugs. It’s a life raft."

Context: Big Health and CVS originally partnered in 2019 to enable reimbursement of its digital therapeutics, integrating within the PBM's existing payment process for medications. 

"That reduced a significant barrier to growth," Hames says. "That made it much easier for plan sponsors — large employers, health plans — to actually reimburse our products ... This is just another step in our funnel."

Catch up quick: Big Health earlier this year scored $75 million in Series C funding led by SoftBank Vision Fund 2. 

ArrowMark Partners entered as a new investor, joined by existing investors Octopus Ventures, Gilde Healthcare, Kaiser Permanente Ventures (KPV) and Morningside Ventures

The funding will support its plans to launch six new digital therapeutics, the San Francisco-based company said.

Big Health has about 10 million covered lives globally, and in the commercial population, has provided care for up to a quarter of a million people, Hames says.  

3. Addressing mental health's Rx problem

Illustration of a brain-shaped maze with the correct path highlighted.

AI Medical Service, a Japanese startup that helps providers use AI to spot gastrointestinal cancer, raised US$70 million in a Series C funding round led by SoftBank Vision Fund 2 with participation from Globis Capital Partners, World Innovation Lab and Incubate Fund. http://axios.link/t1es

Pillsorted, a U.K.-based automated prescription delivery startup, raised $6m in seed funding from Pear VC, Hoxton Ventures and Edison Partners. http://axios.link/4BkZ

Ceryx Medical, a U.K.-based health tech startup, raised £3.8m in seed funding. www.ceryxmedical.com

Ingenovis Health, a health care workforce solutions company, acquired VISTA Staffing Solutions from Envision Physician Services. Cornell Capital and Trilantic North America back Ingenovis. 

L Squared Capital Partners acquired Globe Scientific, a Mahwah, N.J.-based provider of laboratory consumable supplies. www.globescientific.com

Tenon Medical, a Los Gatos, Calif.-based surgical implant company, raised $16m by offering 3.2 million shares at $5, the midpoint of its price range. It offered 0.8 million fewer shares than anticipated. It plans to list on the Nasdaq under the symbol TNON. The Benchmark Company and Valuable Capital acted as joint book-runners on the deal. http://axios.link/XeTw

4. Deals o' the day

Tesseract Health named Michael McConnell head of cardiovascular and digital health from Google, where he was senior clinical lead of Fitbit.

Truepill named Doreen Bortel chief growth officer from Optum, where she was SVP of sales, and John Foster chief people officer from TrueCar, where he held the same title.

Twelve Below named Byron Ling partner from Canaan, where he held the same title.

Well Health named Sarah Shillington SVP of customer experience from TigerConnect, where she was chief client officer, and Ashutosh Agte SVP of engineering from Autodesk, where he was senior director of engineering.

Amwell named Susan Worthy chief marketing officer from Optum, where she was SVP of provider marketing.

5. It's Personnel

Hello and happy almost Friday, Health Tech enthusiasts!

📉 Situational awareness: Teladoc is getting hammered. After recording a $6.6 billion impairment charge on Livongo, the former telehealth leader saw its stock take a 48% nosedive this morning. 

Driving the news: Competition from surging behavioral health rivals — several of which offer controlled substance prescriptions in addition to therapy — and lower returns on DTC ad dollars, among other things, caused this pain, analysts tell Erin.

🙏 Thanks for reading Axios Pro Health Tech! Please ask your friends, colleagues and plus-ones to sign up.

April 28, 2022

1 big thing: Fertility startups sew $7M seed as baby funding booms