“Good Newzz” is raking good business

A recent Bollywood multi-starrer “Good Newwz” featured a tryst for two couples with in-vitro fertilization (“IVF”) and the movie found great audience across India. It just about endorses the growing awareness of IVF in India and a scalable business proposition within the healthcare sector. No surprise that likes of marquee PE funds went about hunting targets for investment in the sector during 2019. TA Associates invested a good sum in Indira IVF and TPG backed healthcare operating platform Asia Healthcare Holdings bought out Nova IVF. Deal activity in the fertility sub-sector has also witnessed global consolidation with multiple acquisitions including UAE based NMC acquiring Boston IVF, South African Mediclinic purchasing stake in Bourn Hall Fertility, Australian Virtus acquiring SIMS IVF and the Czech company Future Life acquiring majority stake in Nova Vita amongst others. The underlying thesis for these investments essentially recognises the existence of a large addressable market, possibility to standardise services across cities/countries, considerable availability of required  professionals  and ability to use aggressive promotional spend in building trustworthy brand.

“Good Newzz” is raking good business, Kunal Jain and Tarang Shah put forth their thesis for increased investment activity in the fertility treatment service.

In-vitro fertilization process involves fertilization of egg cells by sperm outside the body, in a laboratory dish, and then implanting it in a woman’s uterus. IVF is a type of assisted reproductive technology which is used to treat fertility or genetic problems to assist conceiving a child.

Infertility is an increasing global problem and it is estimated that ~10% of women and ~15% of male globally are inflicted with either subfertility or infertility. Common factors attributable to this problem are increasing career-oriented population base which leads to delayed decision on pregnancies, surge in stress level and changes in lifestyle. Estimates reveal that 10-15% of married couples in India i.e. almost 25 million couples suffer from problems related to infertility and therefore the incidence of  number of IVF cycles in India is growing at around 20% p.a. Still, its estimated that only 2% of infertile couples in India seek treatment and reasons for same include high cost of treatment (at about Rs. 150,000 – 200,000 per IVF cycle, may require multiple cycles), scarcity of skilled IVF specialists in large parts of India, skewed distribution of infertility centres with majority of centres in metro cities only and a near absence of a regulatory framework for quality management and patient safety. All this augurs well for quality capital to flow in the sector and back startups/ professionals with right attitude and approach to build scalable proposition.

The overall market for this service is estimated at around Rs. 6000 cr and growing @ 20% p.a. Increasing awareness & acceptance amongst couples, easing social taboos related to infertility treatments, advancement of technology/ safety features and more importantly, medical tourism from nearby/ developed countries could propel overall business activity in this sub-sector to much higher growth rates. Good Newzz will probably keep coming in the sector from India, a lot more investment activity and possible participation by global players very soon.