VMG Partners has led the $51 million round, with participation from new investors GV and ACME Capital (fka Sherpa Capital).
Through telemedicine and direct-to-consumer sales platforms, startups are streamlining the historically arduous process of accessing contraception.
The latest effort to secure a significant financing round is The Pill Club, an online birth control prescription and delivery service. Consumer-focused investor VMG Partners has led its $51 million Series B, with participation from new investors GV and ACME Capital (formerly known as Sherpa Capital), and existing investors Base10 Partners and Shasta Ventures. The Pill Club declined to disclose its valuation.
Launched in 2016 in San Carlos, California, The Pill Club couples healthcare services with at-home delivery, reaching customers in all 50 states. With a team of doctors, nurses and patient care coordinators, the startup operates its own pharmacy and is licensed to prescribe medication in 35 states. With the new funding, which brings its total raised to $67 million, founder and chief executive officer Nick Chang said he plans to scale the business 50 percent and expand its prescription service across the entire U.S.
“At the end of the day, our company is about empowering women,” Chang told TechCrunch. “What does that mean? It means empowering our patients to make their own healthcare decisions and making reproductive healthcare more common — something to not be shy about or worried about.”
Chang, who has spent his career in medicine and holds an M.D. from Duke University, previously founded Ganogen. The business, which sought to facilitate patient’s access to organ donors, ultimately shut down but was a catalyst to The Pill Club’s formation, as were experiences from Chang’s youth.
“I [grew] up with an older sister who was on birth control since she was 14 for menstrual regulation,” Chang said. “She really felt embarrassed to pick up the medication and to talk to anyone about it and that was really insightful for me. There are so many hurdles in accessing birth control besides clinics being around.”
Some 67 million women between the ages of 13 to 44 live in the U.S.; 19 million of them live in contraceptive deserts, or areas that lack reasonable access to public clinics. The Pill Club wants to eliminate those deserts, as do other companies in the digital health arena.
Digital health has remained one of the hottest destinations for VC investment. In 2018, investors put about $4.5 billion into U.S. companies in the sector, a 17 percent increase year-over-year, according to PitchBook data. Telemedicine startups garnered a record $1.25 billion in funding in that timeframe thanks to large financings for industry leader Oscar, a health insurance startup that raised $540 million in 2018 alone; as well as an $88 million Series A for newcomer Roman, which offers a cloud pharmacy for erectile dysfunction.
Startups focused on women’s health, meanwhile, have continued to garner more attention from VCs. These companies, including The Pill Club and comepetitor Nurx, have not only benefited from the rapid rise of telehealth, but also from a societal shift sparked in part by President Donald Trump and Republican lawmakers’ attempts to limit women’s access to birth control.
“People want to talk about this,” Chang said. “With so much happening from Hollywood to politics … it’s really got some people to say ‘ok, we really need to talk about what we are prioritizing as a society.'”
In addition to accelerating the expansion of its 260-person team, The Pill Club plans to use the investment to explore launching more services within women’s healthcare and to broaden the educational content it offers its customers.
“This is just the beginning of a much broader and bigger movement,” Chang said.
A multi-month investigation by Sweden’s Medical Products Agency into a number of unwanted pregnancies among users of ‘digital contraception’ app Natural Cycles has been closed after the startup agreed to clarify the risk of the product failing. But, on the self-reported data front, the agency said it was satisfied the number of unwanted pregnancies is in line […]
A multi-month investigation by Sweden’s Medical Products Agency into a number of unwanted pregnancies among users of ‘digital contraception’ app Natural Cycles has been closed after the startup agreed to clarify the risk of the product failing.
But, on the self-reported data front, the agency said it was satisfied the number of unwanted pregnancies is in line with Natural Cycles’ own clinical evaluations which are included in the certification documentation for the product.
In its marketing and on its website Natural Cycles describes the app-based system as “93% effective under typical use” — a finding that’s based on a clinical study it conducted of more than 22,000 of its users.
The investigation by Sweden’s MPA began around eight months ago, after a number of users in Natural Cycle’s home market had reported unwanted pregnancies to a local hospital — which then reported the app to the regulator.
The Natural Cycles app uses an algorithm to track fertility by monitoring the user’s menstrual cycle. The process requires women take their body temperature at least several times a week, and do so first thing in the morning, inputting the data into the app which is designed to adapts its ‘fertile’ or ‘not fertile’ predictions to each user’s cycle.
Several users have reported falling pregnant while using the app. But the proportion of women who have done so (at least in Sweden) is in line with efficacy rates reported by Natural Cycles, according to the regulator’s assessment.
Earlier this year the MPA said it had received “approximately 50 complaints” related to unwanted pregnancies in users of the app. But late last week it announced it had concluded its assessment of the app — which it said focused on “product safety, instructions for use and post market surveillance documentation in order to confirm if the product is in compliance with regulations”.
As well as looking at parts of the certification documentation for Natural Cycles, the agency says it assessed monthly reports of unwanted pregnancies among active app users in Sweden, covering a six-month period — with pregnancy data supplied by the company itself on a month by month basis during the first half of 2018.
The agency found the number of reported unwanted pregnancies reported by users to be in line with Natural Cycles’ certification documents for the product, finding a failure rate in typical use of 6.9%.
But it also asked the company to clarify the risk of unwanted pregnancies in instructions for the app.
“Our conclusion is that the number of unwanted pregnancies during the assessed time period is consistent with data shown in the clinical evaluation included in the certification documentation. Since it is important that a contraception app is correctly used, we requested the manufacturer to clarify the risk of unwanted pregnancies in the instructions for use and in the app. These issues have been addressed by Natural Cycles and thereby our review is completed,” said Mats Artursson, investigator at the agency in a statement.
As we reported earlier this year, the startup has lent heavily on aggressive social media marketing of its novel ‘digital contraception’ method — which has sometimes appeared to downplay the risk of failure for what is undoubtedly a relatively complex contraception option, given it requires users to consistently self-monitor (and accurately measure their body temperature) as well as use alternative contraception on days when the app informs them they are fertile.
Natural Cycles admits that factors such as illness, disrupted sleep, drinking alcohol and having an irregular menstrual cycle can have a negative impact on the accuracy of its algorithmic fertility predictions. And says itself that the method is not a suitable contraception choice for every individual.
Nor does the app offer any protection against STDs — unless users combine it with additional barrier methods of contraception.
But despite that, until very recently on its website (and in some of its marketing) Natural Cycles has been making the misleading claim that its contraception app is “99% effective” if used “perfectly”. (Perfect use implying, well, superhuman use.)
And just last month the company was wrapped on the knuckles by the UK’s Advertising Standards Authority — which banned one of its social media ads for being misleading, also warning the company against exaggerating the efficacy of the app in preventing pregnancies.
The assessment by the Swedish MPA looks to have reached similar conclusions about certain aspects of the claims Natural Cycles’ has been making for the app.
When we covered the ASA’s ruling last month Natural Cycle’s website still included the misleading 99% ‘perfect use’ claim — within this confusingly worded paragraph: “With using the app perfectly, i.e. if you never have unprotected intercourse on red days, Natural Cycles is 99% effective, which means 1 woman out of 100 get pregnant during one year of use.”
It’s since scrubbed the paragraph from its website, focusing solely on the 93% effective stat — on which it now writes: “Natural Cycles is 93% effective under typical use, which means that 7 women out of 100 get pregnant during 1 year of use. Typical use effectiveness takes into account all possible reasons for becoming pregnant while using the app: from having unprotected sex on a red day, to the app wrongly attributing a green day or the chosen method of contraception on a red day having failed.”
It’s not clear whether Natural Cycles removed the 99% ‘perfect use’ claim as a result of the ASA ruling — or following the Swedish MPA’s assessment. (We’ve asked the company to clarify the exact changes it made related to the MPA’s findings, which the regulator also says relate to software versioning, and will update this story with any response.)
Its app gained certification as a contraception in the EU in February 2017, and went on to gain FDA clearance (via a De Novo classification request) this summer — giving the product a major credibility boost, even as regulatory clearances still come with plenty of caveats. (In the FDA‘s case it warns that: “Users must be aware that even with consistent use of the device, there is still a possibility of unintended pregnancy.”)
It’s also worth noting that it’s still the case that Natural Cycles has not carried out a randomized control trial to more robustly prove out the efficacy of the product, i.e. by using standard scientific methods.
Instead, users must rely on the findings of its self-selecting clinical study of its own users — which may have its own weaknesses, given that, for example, any user who fails to report an unwanted pregnancy to Natural Cycles would not be reflected in the data it’s providing to regulators.
Commenting on the conclusion of the Swedish MPA’s investigation in a statement, NaturalCycles CEO Raoul Scherwitzl said: “We are pleased that the MPA has concluded its investigation, following a review of our real-world effectiveness data. There has been a lot of discussion about this investigation, and we hope that it will provide some reassurance to women to see eminent bodies like the Swedish MPA and the US FDA in alignment based on the strength of our clinical evidence. We never doubted the effectiveness of our product since the number of reported pregnancies is monitored closely on a monthly basis — this is an ongoing responsibility that we commit to as part of operating in a regulated environment.”
Natural Cycles, a Swedish startup which touts its body temperature-based algorithmic method for tracking individual fertility as an effective alternative to hormonal birth control, has been wrapped by the UK advertising regulator which today upheld three complaints that an advert the company ran last year via Facebook’s platform was misleading. The regulator has banned Natural […]
Natural Cycles, a Swedish startup which touts its body temperature-based algorithmic method for tracking individual fertility as an effective alternative to hormonal birth control, has been wrapped by the UK advertising regulator which today upheld three complaints that an advert the company ran last year via Facebook’s platform was misleading.
The regulator has banned Natural Cycles from running the advert again, and warned it against exaggerating the efficacy of its product.
The ad had stated that “Natural Cycles is a highly accurate, certified, contraceptive app that adapts to every woman’s unique menstrual cycle. Sign up to get to know your body and prevent pregnancies naturally”, and in a video below the text it had also stated: “Natural Cycles officially offers a new, clinically tested alternative to birth control methods”.
“We told Natural Cycles Nordic AB Sweden not to state or imply that the app was a highly accurate method of contraception and to take care not to exaggerate the efficacy of the app in preventing pregnancies,” said the Advertising Standards Authority (ASA) handing down its decision.
The company has leaned heavily on social media marketing to target its ‘digital contraception’ app at young women.
While Natural Cycles gained EU certification for its app as a contraceptive in February 2017, and most recently FDA clearance for marketing the app as a contraception in the US (with the regulator granting its De Novo classification requestthis month), those regulatory clearances come with plenty of caveats about the complexity of the product.
The FDA, for example, warns that: “Users must be aware that even with consistent use of the device, there is still a possibility of unintended pregnancy.”
At the same time, Natural Cycles has yet to back up the efficacy claims it makes for the product with the scientific ‘gold standard’ of a randomized control trial. So users wanting to be able to compare the product’s efficacy against other more tried and tested birth control methods (such as the pill or condoms) are not able to do so.
No birth control method (barring abstention) is 100% effective of course but, as we’ve reported previously, Natural Cycles’ aggressive marketing and PR has lacked nuance and attempted to downplay concerns about the complexity of its system and the chance of failure even as the product’s performance is impacted by multiple individual factors — from illness, to irregular periods.
In the ruling, the ASA flags up the relative complexity of Natural Cycles’ system vs more established forms of contraception — pointing out that:
The Natural Cycles app required considerably more user input than most forms of contraception, with the need to take and input body temperature measurements several times a week, recording when intercourse had taken place, supplemented with LH measurements, abstention or alternative methods of contraception during the fertile period.
Despite all that, Natural Cycles’ website bills its product as “effective contraception”, claiming the app is “93% effective under typical use” and making the further (and confusing worded) claim that: “With using the app perfectly, i.e. if you never have unprotected intercourse on red days, Natural Cycles is 99% effective, which means 1 woman out of 100 get pregnant during one year of use.”
Perfect use of the app actually means a woman would accurately perform daily measurement of her body temperature without fail or fault, and before she’s even sat up in bed, at least several times a week, correctly inputting the data. Forgetting to do so once because — say — you got up to go to the toilet or were otherwise interrupted before taking or inputting a reading could constitute imperfect use.
The BBC spoke to a women who says she made the decision to use the app after seeing that 99% effective claim in Natural Cycles’ marketing on Instagram — and subsequently fell pregnant while using it. “I was sort of sucked into this “99% effective” [claim],” the women told the broadcaster. “You know “even more effective than the pill”… What could possibly go wrong?”
In its ruling, the regulator said it investigated two issues related to the advert run by Natural Cycles on Facebook on July 20, 2017, and both issues were upheld.
The complaints were that Natural Cycles’ advert included misleading and unsubstantiated claims — specifically that the product was: 1. “Highly accurate contraceptive app”; and 2. “Clinically tested alternative to birth control methods”.
Natural Cycles told the ASA that the latter claim is in fact a quote from a Business Insider article which it “considered to be correct” and had thus reproduced in its marketing.
After taking expert evidence, and reviewing three published papers on accumulated data obtained from the app, the regulator deemed the combination of the two claims to be misleading.
We considered that in isolation, the claim “clinically tested alternative to birth control methods” was unlikely to mislead. However, when presented alongside the accompanying claim “Highly accurate contraceptive app”, it further contributed to the impression that the app was a precise and reliable method of preventing pregnancies which could be used in place of other established birth control methods, including those which were highly reliable in preventing unwanted pregnancies. Because the evidence did not demonstrate that in typical-use it was “highly accurate” and because it was significantly less effective than the most reliable birth control methods, we considered that in the context of the ad the claim was likely to mislead.
The ASA also found the advert to have breached rules for substantiation and exaggeration of marketing messages in the Medicines, medical devices, health-related products and beauty products category, as well as being misleading.
At the time of writing Natural Cycles had not responded to requests for comment.