VCs are finally tapping into women’s healthcare, a win for medical hubs like Pittsburgh

After making the decision to freeze her eggs in 2021, startup founder Cally Myhrum Watts found a gap in her healthcare coverage. 

Her employer didn’t have any form of benefit for fertility treatment and her health insurance wasn’t covering the expenses she had to face. That left her having to deal with thousands of dollars in out-of-pocket expenses, and to wonder: Why aren’t fertility treatments seen as healthcare? 

This question, along with the knowledge that there wasn’t supplemental fertility insurance unless she worked at a large company, like Google, fueled her entrepreneurial spirit. Teaming up with Megan Mueller, Myhrum Watts and Mueller founded Pittsburgh-based Lotus Fertility Insurance in 2023, with plans to launch the product next year. 

And what Lotus has been working on comes at what seems to be the right time, as a coalesce forms between how society views women’s health issues and funding for those causes.

“There’s been a gold rush towards women’s health research and funding,” Myhrum Watts told Technical.ly.

VC investment in women’s health startups tripled between 2018 and 2023, according to research from Silicon Valley Bank. US women’s health startups collectively raised $1.14 billion in 2023 across 120 deals, Pitchbook reported. 

Plus, while there’s still very little research directed at women’s healthcare beyond oncology, recent programs have tried to change that. Efforts like the White House’s 2023 Initiative on Women’s Health Research aims to bring more funding to women’s health and close research gaps, could boost funding opportunities even more, Myhrum Watts said.

Still, it’s an upward battle against stigma around not just women’s health issues.

“What we’re really trying to do,” Myhrum Watts said, “is shift a paradigm in how we talk about fertility care because infertility is a disease, defined by the World Health Organization as a disease.”

A tens of thousands dollar investment in starting a family 

VCs and researchers see an opportunity in the previously overlooked women’s health and fertility sectors. 

As of 2023, fertility treatment is a $5.34 billion industry, according to consulting firm Precedence Research. It’s a topic many Americans are familiar with, as 4 in 10 adults say they or someone they know have undergone fertility treatments, Pew Research found.

Lotus specifically targets an opportunity in insurance for costly procedures. When the fertility treatment in vitro fertilization (IVF) isn’t covered by insurance, the average for a single cycle can range from $14,000 to $20,000 according to Arc Fertility. 

This excludes additional costs for medications, genetic testing or storage fees. Those storage fees can also cost a lot in the long run, with yearly storage fees ranging from $200 to $800 annually. 

Lotus would add a rider to life insurance to include fertility protection. This protection add-on would cover treatments from fertility testing to IVF, even covering mental health costs and partial surrogacy costs. 

Location plays a big role in startups’ approaches to healthcare

Where founders set up shop for these women’s healthcare startups can impact their approach, beyond just the current politicization of some fertility treatment methods.

While 23 states now have some form of infertility insurance law, there are numerous restrictions regarding what is and is not allowed. Pennsylvania, where Lotus is based, is one of the states without it. 

Some states have differing laws on what is required with insurance based on company size. There are also different requirements that the patient has to meet to have this coverage. Some of the more costly procedures are also not required to be covered, like with IVF in Ohio. 

Being located in Pittsburgh, PA has helped Lotus Fertility as a women’s health startup, according to Myhrum Watts. With Pittsburgh being a big healthcare city, Lotus has been able to find other women’s health and fertility institutions, like the Magee-Womens Research Institute, to collaborate with to help build their product to be as innovative as possible. 

Pittsburgh has instilled itself as a major healthcare location over the last few years, with many hospitals and medical centers calling Pittsburgh home. In fact, Pittsburgh ranks as having the second-most hospitals and doctors per capita in the nation. 

The number of healthcare workers in the city makes it so that nearly one out of every five workers is in healthcare. Beyond Pittsburgh, it’s estimated by the Bureau of Labor Statistics that healthcare employment will grow 15.4% from 2022 to 2032. 

“The problem with our healthcare system, or our approach towards fertility, is it doesn’t take a proactive lens on how we take proactive measures toward our fertility,” Myhrum Watts said. “We don’t know we have a problem until we are in it.”