We recently invested in the at-home sperm testing business ExSeed, our second investment into the company from our EIS Fund. We first backed Morten, Emil and the team early in early 2020, when we led the seed round, and our thesis and excitement for the business remain unchanged. As ever, we focus on the quality of the team, the technology they have developed and the themes and trends that we find fascinating.
Sperm quality in the western world has fallen by around 50% over the last 40 years, due mainly to lifestyle and pollution issues, and in 40% of cases of fertility difficulties these are due to male factors. Despite this, it is often the female that is initially subjected to tests. Add to this the trend of people choosing to have babies later in life and understanding fertility has never been more important for couples. But for men, it has been seen as annoying and often a little embarrassing (and it is well understood that men are generally reluctant to visit medical establishments of any kind).
The kit developed by ExSeed for at-home, clinical grade sperm testing amazed us the moment we saw it. Firstly, while the kit itself is a far cry from the usual medical test, the particular aspect that hooked us was the use of your smartphone camera to take the video that is then analysed by ExSeed’s AI technology to provide the result. This is turn enables the test to be taken entirely in the comfort and privacy of one’s home – no visiting a clinic, no sending a sample in the post and no paying a lab to run the test. In our view this is a game changer.
The trend of individuals taking control of their own health is nascent, but we expect it to continue as the availability of tools to gather data increases. Having the information to hand on its own is not enough though – for those with a sup-optimal result it’s important to understand what actions can be taken to drive improvement. ExSeed also offers additional advice and supplements to help men improve the quality of their sperm, which means that it can have a real and lasting impact on men’s fertility.
The sales channels for ExSeed are varied. There is the direct-to-consumer e-commerce angle, but over time most of the revenues should come from fertility clinics and other corporate customers. The product is so good that clinics provide it to their patients because the results are as reliable as they can produce themselves and it removes the time (and money) taken up in administering the tests on their premises. ExSeed already has a number of clinic customers across the UK and Europe, and we expect this to grow significantly. We find the dual channels of D2C and B2B, combined with the ability to develop subscription revenue models for both, very exciting. The fact that the problem the company is attacking is global is also compelling.
We are proud and delighted to be supporting ExSeed for a second time. This round will be used to grow the sales team, continue developing market-leading technology, and also to press ahead with geographical expansion. We are pleased to welcome new lead investor Ascension Ventures and are pleased so many of the existing investors have also chosen to follow on.