Demographic trends are often the spark for a startup idea. If you can layer on easing financial burden for a group of users, you may be on to something. That’s how I read the pitch for Millennial Fertility stock, now raising $1 million on the Netcapital equity crowdfunding platform.
So what demographic trends are bolstering Millennial Fertility? Well, in 2018, the average age of a woman having a first baby in the U.S. was 26.9 years. Importantly for the startup, that is up from 22.7 years in 1980. And as first-time mothers are getting older, almost 25% of women ages 30-39 have trouble getting pregnant, according to the National Center for Health Statistics.
Now, how does the concept of easing financial burden fit in? Well, traditional options for addressing infertility — assisted reproductive technology (ART) — are expensive. The first round of in vitro fertilization, the main type of ART, can cost upward of $25,000. Follow-on rounds could cost $12,000 each. However, 25 million women of childbearing age in the U.S. struggle to access these treatments because of where they live.
Enter Millennial Fertility, which has developed a solution to getting pregnant. The company touts its $99 First Step Conception kit as accessible to all, even people with lower household incomes. As a home-use treatment, it doesn’t matter where you live.
The fundraising campaign, with a Sept. 29 deadline, has a $99 minimum investment, with a $1.07 million target. If successful, the firm’s post-money valuation will be $16 million. It is a Title III equity deal, so it is open to all investors.
Getting Pregnant Got Harder With the Pandemic
As if getting pregnant through traditional fertility treatments wasn’t hard enough already, the novel coronavirus has made it virtually impossible. In mid-March, the American Society of Reproductive Medicine recommended that doctors suspend initiation of all new ART treatment cycles. Five months later, that advisory is still in place.
Millennial Fertility’s First Step kit is delivered to the user’s front door, packed with a complete treatment: Eight ovulation predictors, one pregnancy test, a semen collector and one patented conception cap. The cap is key to the process, as it gets placed on the user’s cervix for three to five hours to initiate the insemination process.
The startup is targeting anyone trying to get pregnant. The marketing highlights that First Step helps all couples, regardless of orientation. And, as the firm notes, “you don’t have to be diagnosed with a fertility issue to use our kit.”
Millennial Fertility also make the case that cancer survivors — who can’t use any form of hormone-based fertility treatments — are safe to use the First Step kit. Similarly, it points out that the $99 kit is a viable option for the 41% of African Americans and 36% of the Hispanic population that uses public assistance. These demographics likely have no fertility coverage under Medicaid, and cannot otherwise afford ART-based treatments.
The cervical cap technology originated with the startup’s parent company, Conceivex, which created a prescription version of the product. Millennial was able to gain clearance from the U.S. Food and Drug Administration for its own version. At this point, however, Conceivex has transferred all of the related intellectual property to the startup.
In short, according to Millennial, the firm is not marketing a concept. “We are poised and ready for a prompt launch,” reads the Netcapital pitch.
Millennial Fertility Has a Simple Business Model
Millennial Fertility has a business model built around making access to the $99 kit as easy as possible. Sales are via its e-commerce site and over-the-counter markets. It describes this approach as “really important.” Why? Because 94% of current fertility services are used by households with annual incomes more than $60,000.
The model envisions the average couple to use between two and three conception kits in the process of trying to get pregnant. Millennial Fertility is looking at a global fertility market that will grow at a rapid clip to near $31 billion by 2023.
|Eligible population||325 million||500 million|
|Number of millennials (age 23-37)||71.5 million||120 million|
|12.5% have fertility issues||8.9 million||15 million|
|12.5% trying to get pregnant per year||1.1 million||1.9 million|
|Yearly Market Potential at four $99 kits per user||$442 million||$743 million|
|% of potential yearly customers to generate $50 million per year in revenue||11.3%||6.7%|
Source: Millennial Fertility Co.
Millennial Fertility is also exploring partnering with U.S. healthcare companies that want to expand their offerings. International expansion is also on the table, as are white-label versions. These white-label versions would be available at pharmacies like Rite Aid (NYSE:RAD) and through insurers such as Cigna (NYSE:CI) and UnitedHealth (NYSE:UNH).
Millennial Fertility Stock Is in a Booming Market
As I mentioned above, some estimates call for the global fertility services market to hit $31 billion by 2023. Others call for it to grow to $36 billion in the same time period.
That market covers everything from egg-freezing services to IVF. It includes complex, AI-driven apps and wearables that monitor users’ fertility and menstrual cycles. U.K. investor Octopus Ventures tracked a four-fold increase in fundraising by startups in fertility treatments and testing kits between 2014-2019.
To be sure, Millennial Fertility stock is but a niche in the overall women’s health market, enabling personalized medicine and utilizing huge data sets to facilitate better patient outcomes.
However, Millennial Fertility, with its low-tech, complete cervical cap solution, seems to offer an excellent initial option for people looking to get pregnant, prior to making a leap to more advanced, but also more expensive, treatments.
Robert Lakin is a veteran financial writer and editor, following fintech, agtech and property tech startups. He was previously emerging markets editor for Bloomberg News in Tel Aviv. He is a contributor to the Powered by Battery blog. As of this writing, Robert does not own any of the aforementioned securities.
Investing through equity and real estate crowdfunding or asset tokenization requires a high degree of risk tolerance. Despite what individual companies may promise, there’s always the chance of losing a portion, or the entirety, of your investment. These risks include:
1) Greater chance of failure
2) Risk of fraudulent activity
3) Lack of liquidity
4) Economic downturns
5) Dearth of investor education
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