KEY TAKEAWAYS
  • The rising age of mothers at childbirth, health stressors, and high costs of living are boosting the global need for fertility services.
  • In response to these trends, Private Equity firms are deploying capital to push for industry consolidation.
  • Other fertility-related services, such as egg freezing, genetic testing, and insurance packaging are seeing growth as well.

The first child conceived via IVF turned 40 this year. Since Louise Brown’s birth in 1978, however, innovation on the core technology has been incremental. A series of improvements in storage media and incubation of the blastocysts have led to progressively higher success rates. However, in the past 20 years, there has been little change in the IVF procedure itself or in the patient experience.

Instead, technological innovation has centered around cryo-preservation of eggs and genetic testing. Cryo-preservation helps women preserve their fertility and reduce the chance of miscarriage and birth defects which increase with age. According to the U.S.’s Society for Assisted Reproductive Technology (SART), 7,000 women froze their eggs in 2016 – five times the figure in 2009. Genetic testing to screen for potential defects in the fetus has also risen substantially in popularity over the last five years.

Innovations have also permeated the business model of fertility treatment. As the number of fertility clinics has grown, they have also begun to consolidate into corporate chains. Of the 4,000 clinics operating worldwide, 1,000 are in the U.S.; 600 each in EU, Japan, and India; and 400 in China. The fastest growth is in India and China, with China adding 100 clinics in the last three years alone.

Private equity is playing a prime role in the industry’s consolidation. For example, Lee Equity Partners has funded the expansion of Prelude Fertility into a network of 109 clinics in the U.S. The network is now responsible for over 40% of the donated eggs in the country.

This trajectory in the industry has even catapulted some chains across borders. For instance, IVI RMA Global was founded in Spain but now operates worldwide following a string of acquisitions in the U.S. and India. Medical tourism is also on the rise, with customers eager to take advantage of the lower cost of treatment cycles in countries such as India and Thailand.

Companies such as Prelude and Glow are focusing on improving customer experience. Glow brings transparency and choice to the fertility market by helping customers access clinics with the highest IVF success rates at the lowest possible cost. Meanwhile, Prelude offers a subscription model to cover a customer’s entire fertility needs. For a monthly fee, a customer signs up to “The Prelude Method,” which leads them through the journey of egg freezing, IVF, genetic testing, and childbirth.

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