Fertility Startup Kindbody Set to Cut Valuation, Letter Shows

(Bloomberg) — Fertility startup Kindbody is working to raise money in a funding round that would give the company a significantly lower valuation, a letter sent to potential investors and viewed by Bloomberg shows.
Kindbody is seeking to raise $30 million to $50 million by mid-September in new financing that would put the startup’s pre-money valuation at $600 million, according to the letter, the contents of which were confirmed by multiple people. The company had previously earned a $1.8 billion valuation, including dollars raised. The terms of the latest funding effort were set by a new “blue-chip growth equity investor” who plans to inject at least $10 million into the company, according to the letter. 
Kindbody spokeswoman Margaret Ryan said in a statement that Bloomberg’s reporting for this story “contains multiple factual inaccuracies.” The company declined multiple requests to elaborate on the statement. 
Kindbody has marketed itself as a fertility services provider that can offer lower prices than competitors and enjoys a market advantage because it owns and operates clinics, unlike some rivals that serve as middlemen. Bloomberg reported in November that the company had posted larger-than-projected operating losses and wasn’t expecting to turn a profit until mid-2024, citing people with direct knowledge of Kindbody’s situation. 
The startup has cited a number of reasons for falling behind on financial estimates: Fewer employees at Kindbody’s client companies have used its fertility benefits than expected. And Walmart Inc. — one of the company’s largest clients — was estimated to have a smaller fertility-eligible population than previously planned, Bloomberg reported at the time. 
Founded in 2018, the New York-based startup grew rapidly by offering in-vitro fertilization and other services such as egg freezing and storage. The company markets directly to consumers and has also served as an employer benefits provider to companies like Walmart and Tesla Inc.
Its growth was helped along by venture capital funding and debt, allowing Kindbody to open new clinics and make acquisitions expanding its presence. The most notable deal was in 2022 when the company bought Vios Fertility Institute, a fertility network with facilities across the Midwest that doubled Kindbody’s footprint to 26 clinics at the time.
In recent months, the company has worked to cut costs, closing multiple clinics including ones in Detroit and Illinois, according to Kindbody’s website and emails sent to patients and viewed by Bloomberg. The closures resulted in some job losses, according to people familiar with the matter said, asking not to be identified because the information isn’t public. 
The company has also seen turnover among doctors, with four leaving the company this year, according to LinkedIn profiles and press releases. Four doctors departed from Kindbody in a matter of months at the end of last year, people with direct knowledge of the departures said, asking not to be identified because they aren’t authorized to speak publicly. In total, Kindbody employs at least 27 fertility doctors, according to its website.
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