Investors are betting big on the egg-freezing market
- Start-up fertility establishments have become a popular alternative to traditional fertility clinics and hospitals — so much so that Wall Street is taking notice and traditional fertility doctors are issuing words of caution.
- Investors are betting big on the buying power — and interests of — millennial women looking for more control over their childbearing choices.
- Physicians such as Dr. Sherman Silber, head of the Infertility Center at St. Luke's Hospital in St. Louis, say they're concerned women who turn to profit-driven egg-freezing boutiques may not get all of the information they need.
On a recent Tuesday night, a crowd of at least 100 women in their 20s and 30s gathered in a yellow-splashed loft space in Manhattan. Scented candles and tastefully potted plants filled the room. Relaxing music, the kind you might find in an upscale bar, played in the background. Laughter broke out when a pair of prosecco bottles were popped and glasses of bubbly were poured and passed out.
As the group sipped, Dr. Fahimeh Sasan, wearing a red fitted dress, walked to the front of the room. It was time to discuss the business at hand: egg freezing.
"The price we're offering tonight is $5,000 per cycle, which includes anesthesia, retrieval and one year of storage," she said. "Whatever age you are, today is the best day to freeze your eggs."
This gathering occurs often at Kindbody, one of a handful of new stand-alone egg freezing boutiques taking the fertility industry — and a nation of millennial women — by storm.
"Our events always sell out," said Rebecca Silver, director of marketing for Kindbody and the brain behind its slick campaigns, which include Instagram posts often generating tens of thousands of clicks and female empowerment-themed slogans like "Own your future" and "Plan your path."
Since launching Kindbody in August 2018, Silver and her colleagues have prided themselves on knowing, and capturing the attention of, the egg-freezing market: millennial women looking for information and a sense of control when it comes to their fertility.
"Egg freezing has become like a mantra for how to be an independent woman," Silver said. "The people who have frozen their eggs are doing the cool new thing. It's part of the 'You don't need a man and if you're single, you don't have to have kids right now' moment — a new wave of feminism."
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Over the last few years, start-up fertility establishments like Kindbody have become a popular alternative to traditional fertility clinics and hospitals — so much so that Wall Street is taking notice and traditional fertility doctors are issuing words of caution.
"It's a little bit of a disruptor," said one investor, Jon Santemma.
Santemma, co-founder of Regal Healthcare Capital Partners — which seeks out partnerships with "leading-edge" health care entrepreneurs — is among the investors betting on the continued growth of egg freezing. His financial backing is going to Extend Fertility, a rival to Kindbody that claims to be the first and busiest of the current crop of standalone egg freezing studios.
Since launching in 2016 in New York, Extend has overseen nearly 2,000 egg-freezing cycles, the process of retrieving and then freezing a woman's eggs. A co-founder of the company, Dr. Joshua Klein, anticipates tens of thousands more cycles in Extend's future. Extend plans to open locations on the West Coast before 2020.
"Just looking at the numbers, I think egg freezing as an industry is here to stay," Santemma said. "The market's growing 25 percent a year."
Santemma isn't the only investor shelling out for egg-freezing startups. Kindbody's backers, Silver said, include Perceptive Life Sciences, a biotech hedge fund, and RRE, a venture capital firm.
Trellis Fertility Studio, which launched in November 2018 in New York, with plans to expand throughout North America, is under the umbrella of IntegraMed Fertility, an extensive network of fertility clinics backed by the private equity firm Sagard Capital.
As early as 2017, Wall Street investors were identifying the fertility market as one to watch.
"The U.S. fertility clinic market has come of age and is ripe for a merger and acquisition cycle," Capstone Partners, an investment banking firm, wrote in 2017. "The wave is already beginning."
Investors are betting big on the buying power — and interests of — millennials, zeroing in on independent, proactive single women marrying later in life than previous generations, if at all. These women are fully aware of ticking biological clocks as in vitro fertilization struggles for many couples have become more mainstream.
"I'm a graduate student. I haven't even started my career yet and I'm very single," said Alex Yoss, 28, at a recent egg-freezing informational session hosted by Kindbody. "I'm trying to take over what I want with my life."
In 2009, just 475 women in the United States froze their eggs, according to the Society for Assisted Reproductive Technology. By 2016, that number had skyrocketed to nearly 7,300. And, according to Gina Bartasi, founder of Kindbody, the numbers continue to grow.
But doctors are growing worried by the rush to private egg-freezing facilities like Extend Fertility and Kindbody. Dr. Sherman Silber, head of the Infertility Center at St. Luke's Hospital in St. Louis, helped pioneer the vitrification process that makes modern-day egg freezing possible. But he's still concerned that private boutiques are more focused on wooing — and taking money from — patients than they are about providing quality care.
"Investors see it as a potential for a big killing, and they're not going to have any interest in medical quality," Silber said. "Most of these investors are just looking to show an increased profit every year, and they plan to sell for a huge gain in three to five years."
Silber said he's concerned women who turn to profit-driven egg-freezing boutiques are not necessarily getting all of the information they need, especially when that information is being provided at cocktail party-themed informational sessions, like the ones Kindbody hosts.
"We think the women need to be properly and soberly informed, not with wine in their head," Silber said.
Silver defended Kindbody's decision to serve alcohol, noting most of the women at the events never have more than half a glass of wine or prosecco and that alcohol is served in an effort to make attendees comfortable.
Everything is totally optional and we trust women can make their own decisions as to whether they want to have a glass of prosecco," Kindbody's Silver said.
Dr. Pasquale Patrizio, director of the Yale Fertility Center finds the fear-inducing marketing strategies many of the studios employ problematic, particularly by suggesting that women may never become mothers if they don't freeze their eggs.
"These entrepreneurs are trying to capitalize on the fears of the young women," he said, adding that the decision to freeze eggs is "nothing to trivialize."
"It's an important decision, and it's not an easy one," Patrizio said. "It requires a long discussion with a physician."
Bartasi argues that egg-freezing startups like Kindbody are filling a need that traditional medical establishments have overlooked, particularly for women who want to avoid sterile clinics that can be long on wait time and short on personal attention.
"The medical system is archaic," Bartasi said. "We've brought accessibility to the patient."
Physician assistants at Kindbody use Facetime to communicate with patients after-hours, walking them through the steps of daily injections.
A self-described "serial entrepreneur," Bartasi has no medical degree, but has been involved in the fertility industry for more than a decade. She launched Fertility Authority, a platform aimed at sharing fertility information, in 2008, and then its egg-freezing offshoot EggBanxx in 2014.
Kindbody is Bartasi's most ambitious business to date, with a clinic on Manhattan's Fifth Avenue and other locations, including on the West Coast, slated to open in the near future. The company offers attractive price packages and payment plans. The most popular is the three-year plan, which allows clients to pay in monthly installments for packages that start at around $6,000 per retrieval, not counting the $3,000-5,000 in medication costs.
Extend Fertility and Trellis also offer payment plans, and while the prices differ slightly, they all are aggressively courting would-be patients with highly produced marketing campaigns that fill the social media feeds of millennial women.
Extend Fertility's social media ads include a photo of a cup of frozen açaí next to a cartoon image of a woman's egg that suggest freezing eggs is as easy and cost-effective as purchasing a frozen treat.
The ad is part of what Extend Fertility's new CEO, Anne Hogarty, calls Extend's "Let's Chill" campaign. Hogarty had been at BuzzFeed for four years, where she oversaw its international revenue-generating strategy, before segueing into the fertility industry.
"We have ads on Facebook and Instagram for women to start the conversations," Hogarty said in response to criticism that the ads trivialize a medical process that involves injections and anesthesia. "We are very careful, when women follow up to get more information, that the information is transparent and truthful and lists all the risks and benefits of egg freezing."
Klein acknowledges there's a business side to Extend, but says the company places an emphasis on medical quality.
"Obviously we care about our marketing, but we have to have a qualified team," Klein said, pointing to his years of experience working at a traditional fertility clinic where he oversaw a multitude of egg retrievals, and to Extend's state-of-the-art lab, overseen by embryology expert Dr. Leslie Ramirez.
"We started with doctors and an embryologist, and only from there did we go out to the world and not the other way around."
Klein's team also eliminated a formal waiting room and hired fertility coaches who remain consistent points of contact for patients, in a sort of concierge capacity.
Extend has also agreed to freeze the eggs of Instagram influencers for reduced rates in exchange for posts promoting their experiences at Extend to their thousands of followers. Trellis Fertility Studio will also pay social media influencers to help spread the word about its egg freezing services.
Trellis courts its patients with spa-like amenities, including Turkish-cotton bathrobes for patients to wear during exams and procedures, fresh flowers placed throughout the studio and a juice bar. It's additionally named its examination rooms after powerful women like Malala Yousafzai and Oprah Winfrey in keeping with the empowerment-themed setting Trellis leaders say they want to establish for their patients.
As part of Kindbody's "pop-up events" strategy, the company slapped its logo on a bright yellow van similar to a food truck — what it calls the first mobile fertility lab — to court potential patients. Ads announcing where the van will be parked next have attracted crowds of hundreds of women, Silver said.
Silver says women have lined up around the block to get fertility assessments from the van, including a blood test that measures a woman's AMH level, a hormone used as an indicator in determining her ovarian reserve. Coming soon, Silver says, will be Kindbody's first fertility bus, which will include ultrasound equipment and operate as a mobile clinic.
Patrizio is worried the bells and whistles are there to intentionally distract patients from asking important questions.
"They are trying to convince you to do something that seems to be extremely easy, when it's not," Patrizio said, pointing to the medical complications that can arise from egg retrievals and the difficulties associated with thawing and successfully fertilizing previously frozen eggs.
"At the end, you're not freezing success," Patrizio said. "You're freezing a chance. It's not the same as when you buy insurance for your house or a car. There's no guarantee that you'll be able to use the eggs — there's no guarantee there's a baby at the end, and you need to know that."
The ultimate test for the new crop of egg-freezing establishments, though, will come when clients decide they want to have children — and the boutiques can say the eggs they've retrieved have finally resulted in actual babies.
Extend Fertility has been around for nearly three years — and, so far, has no baby to show for the thousands of eggs that it has frozen.
"It's a lag-time issue," Klein said, noting that no babies have been born yet because most of Extend's clients are intentionally putting off parenthood. Klein predicts Extend will be able to share news of its first baby "in the next few months."
How many babies will ultimately be born from all of the eggs the studios freeze remains the big question.
Silber points to a 2014 report by Dr. Ana Cobo of the Valencia Infertility Institute in Spain, one of the few clinics worldwide to have introduced an egg-banking program for its egg donation and fertility preservation patients. The study found that it takes 40 eggs, properly frozen, to provide one woman with a 97 percent chance of having a baby.
The number of eggs retrieved per egg-freezing cycle varies from woman to woman, but often does not exceed 10 to 15 eggs, according to Silber, meaning a woman ideally needs to undergo multiple egg retrievals to increase her chances of getting pregnant — something many women may not be aware of.
"I think there's going to be a lot of lawsuits," Silber said. "When they thaw those eggs, there are going to be a lot of nonpregnancies and then women are going to be told there should have been 40 eggs frozen, not 10."
Empowerment through control
The leaders of the egg-freezing boutiques NBC News spoke with insist they're giving women all of the information they need and they are upfront about the risks.
"I would never say it is an insurance policy," Extend's Hogarty said of egg freezing. "I say we're giving you a boost."
Lisa Wright, 37, said that after undergoing her egg retrieval at Extend Fertility two years ago, she felt "empowered, because I had control."
Wright, a Delta Airlines pilot, had gone through what she calls a "gut-wrenching" break-up prior to her retrieval, and wanted to enhance her chances of eventually becoming a mother.
She went through one cycle at Extend and froze 13 eggs.
"I treated it like an insurance plan," she said. "It maximized my chances. I feel like I did everything I could except for starting a family prematurely."
Asked how she'll feel if none of her frozen eggs eventually result in her having a baby, Wright paused.
"With insurance, you have to hope for the best," she said. "But if it doesn't, it probably wasn't part of the grand plan."
Silber predicted that many of the current crop of egg boutique investors will get out of the industry after turning a profit, and before most of the eggs have been thawed. He wondered what will happen to the eggs frozen at stand-alone studios and boutiques if some of them fold or merge before one-time patients come back to use their eggs.
Silver says she believes the egg freezing boutique business model is here to stay.
"We are trying as fast as we can to set up new clinics. The demand has been overwhelming," she said. "As women keep having children later and keep wanting to keep all their options available, I see it only increasing."
Silber's advice to women: ask questions, lots of them, of anyone seeking to freeze their eggs.
"Women should be asking a whole range of questions of these establishments," Silber said. "Questions like: 'What is your profit margin? How do you know the eggs will be good when you thaw them? All of your studies have been done on 22-year-olds, and I'm 35. What are statistics for 35-year-olds? Do you guys do the thawing?'"
"I think many women are intimidated to be asking these questions. But they need to ask them."
— By Mary Pflum, producer for NBC News covering business, technology, and women's issues