KindBody recently announced a $100 million debt investment from the life sciences division of investing firm, Perceptive Advisors, which puts its total debt-equity at $290 million. With a valuation of $1.8 billion following its last equity round (Series C), the company is poised to go public – something that founder Gina Bartasi says they plan to do in 2023 according to Fierce Health Care.

“Our focus is on profitable growth and achieving both EBITDA positive and cash flow positive this year. We believe both are essential for a successful IPO,” said Bartasi in an email to Inside Reproductive Health.

KindBody is a multi-channel fertility clinic network that also provides fertility benefits for employers. Bartasi shared that about half of KindBody’s revenue comes from employers and about 30% comes from its managed care service line. The remaining 20% of revenue comes from direct access of services.

This new raise also pushes KindBody’s total funding well over competitors in the fertility benefits space, such as Carrot, with a total $114.2M in funding, according to Crunchbase. Progyny raised a total $115.5M before their initial public offering, according to Crunchbase, and their market capitalization is now $3.06 billion according to Google Finance.

Its 2022 acquisition of Vios Fertility Institute, which operated clinics in Illinois, Michigan, Missouri, Oregon, Washington, and Wisconsin, doubled KindBody’s number of brick-and-mortar clinics to a grand total of 31. With this new $100M investment, the company plans to open 10 more clinics in underserved areas, KindBody shared in a press release.

“We’re prioritizing opening clinics in ‘fertility deserts,’ or underserved markets that are often outside major metropolitan areas or lack significant competition, that have a high need and long wait times to see fertility doctors,” Bartasi said.

In 2023, KindBody plans to open clinics in Seattle, Brooklyn, Philadelphia, and Miami, said Bartasi, who previously founded fertility benefits company Progyny.

Vios was one of three companies KindBody acquired in 2022. In June, it acquired genetics testing company Phosphorus Labs and combined it with its KindLabs division. Then, in August, KindBody acquired the Chicago-based surrogacy agency Alternative Reproductive Resources, combining it with its KindEOS division.

These acquisitions position KindBody to be an end-to-end solution for fertility services. The company already offers fertility benefits to employers in addition to clinical care both in-person and virtually. Now, the company can offer genetic testing and surrogacy as well.

An investor-executive in the fertility space, who did not wish to be named, said in an interview that companies are currently having trouble profiting off of genetics testing due to its oversaturation in the market.

“There's overcapacity in the number of sequencers out there. And that means that drives down the price of what you can charge for those tests. So it's most likely a loss-making genetics company that they are carrying there,” the investor-executive said.

While surrogacy can be a bit more profitable, it is also subject to legal and ethical changes that can happen overnight, the source said.

According to Bartasi, KindBody is also using the $100M loan to “sharpen our operations and make strategic acquisitions to increase access to care.” The company is looking to acquire both “virtual and fertility” companies that can help to expand KindBody’s access, Bartsai said.

Last year, KindBody also added 42 new employer clients, including Walmart, bringing its grand total to 112.

On the clinical side, KindBody employs 34 reproductive endocrinologists and 52 embryologists. The company’s spa-like practices aim to appeal to millennial and Gen Z patient-consumers who don’t want their healthcare to appear sterile; the waiting rooms are called “lobbies”.
“There are not many interesting assets [in reproductive medicine] with strong branding,” the investor-executive said. “And KindBody has done branding fantastically in the market.”

Perceptive Advisors has invested in KindBody previously during its Series C funding round. The New York-based firm specializes in life science and biotech companies. KindBody is currently the only fertility company located on its website’s list of investments.

Corrections and Amplifications:

Correction: 3/9/23 News Digest Article titled Natera revenue over $800 million, net loss almost $600 million for 2022 by Natasha Spencer. Natera's 2022 net loss was actually $547.8 million, which means that rounding up to "almost $600 million" is inaccurate.

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