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Legacy, a sperm testing and freezing service, just raised $3.5 million to send the message to men: get checked

Legacy, a male fertility startup, has just raised a fresh, $3.5 million in funding from Bill Maris’s San Diego-based venture firm, Section 32, along with Y Combinator and Bain Capital Ventures, which led a $1.5 million seed round for the Boston startup last year.

We talked earlier today with Legacy’s founder and CEO Khaled Kteily about his now two-year-old, five-person startup and its big ambitions to become the world’s preeminent male fertility center. Our biggest question was how Legacy and similar startups convince men — who are generally less concerned with their fertility than women — that they need the company’s at-home testing kits and services in the first place.

“They should be worried about [their fertility],” said Kteily, a former healthcare and life sciences consultant with a master’s degree in public policy from the Harvard Kennedy School. “Sperm counts have gone down 50 to 60% over the last 40 years.” More from our chat with Legacy, a former TechCrunch Battlefield winner, follows; it has been edited lightly for length.

TC: Why start this company?

KK: I didn’t grow up wanting to be the king of sperm [laughs]. But I had a pretty bad accident — a second-degree burn on my legs after having four hot Starbucks teas spill on my lap in a car — and between that and a colleague at the Kennedy School who’d been diagnosed with cancer and whose doctor suggested he freeze his sperm ahead of his radiation treatments, it just clicked for me that maybe I should also save my sperm. When I went into Cambridge to do this, the place was right next to the restaurant Dumpling House and it was just very awkward and expensive and I thought, there must be a better way of doing this.

TC: How do you get started on something like this?

KK: This was before Ro and Hims began taking off, but people were increasingly comfortable doing things from their own homes, so I started doing research around the idea. I joined the American Society of Reproductive Medicine. I started taking continuing education classes about sperm…

TC: Women are under so much pressure from the time they turn 30 to monitor their fertility. Aside from extreme circumstances, as with your friend, do men really think about testing their sperm? 

KK: Men should be worried about it, and they should be taking responsibility for it. What a lot of folks don’t know is for every one in seven couples that are actively trying to get pregnant, the man is equally responsible [for their fertility struggles]. Women are taught about their fertility but men aren’t, yet the quality of their sperm is degrading over the years. Sperm counts have gone down by 50 to 60% over the last 40 years, too.

TC: Wait, what? Why?

KK: [Likely culprits are] chemicals in plastics, chemicals in what we eat eat and drink, changes in lifestyle; we move less and eat more, and sperm health relates to overall health. I also think mobile phones are causing it. I will caveat this by saying there’s been mixed research, but I’m convinced that cell phones are the new smoking in that it wasn’t clear that smoking was as dangerous as it is when the research was being conducted by companies that benefited by [perpetuating cigarette use]. There’s also a generational decline in sperm quality [to consider]; it poses increased risk to the mother but also the child, as the risk of gestational diabetes goes up, as well as the rate of autism and other congenital conditions.

TC: You’re selling directly to consumers. Are you also working with companies to incorporate your tests in their overall wellness offerings?

KK: We’re investing heavily in business-to-business and expect that to be a huge acquisition channel for us. We can’t share any names yet, but we just signed a big company last week and have a few more in the works. These are mostly Bay Area companies right now; it’s an area where our experience as a YC alum was valuable because of the founders who’ve gone through and now run large companies of their own.

TC: When you’re talking with investors, how do you describe the market size? 

KK: There are four million couples that are facing fertility challenges and in all cases, we believe the man should be tested. So do [their significant others]. Almost half of purchases [of our kits] are by a female partner. We also see men in the military freezing their sperm before being deployed, same-sex couples who plan to use a surrogate at some point and transgender patients who are looking at a life-changing [moment] and want to preserve their fertility before they start the process. But we see this as something that every man might do as they go off to college, and investors see that bigger picture.

TC: How much do the kits and storage cost?

KK: The kit costs $195 up front, and if they choose to store their sperm, $145 a year. We offer different packages. You can also spend $1,995 for two deposits and 10 years of storage.

TC: Is one or two samples effective? According to the Mayo Clinic, sperm counts fluctuate meaningfully from one sample to the next, so they suggest semen analysis tests over a period of time to ensure accurate results.

KK: We encourage our clients to make multiple deposits. The scores will be variable, but they’ll gather around an average.

TC: But they are charged for these deposits separately?

KK: Yes.

TC: And what are you looking for?

KK: Volume, count, concentration, motility and morphology [meaning the shape of the sperm].

TC: Who, exactly, is doing the analysis and handling the storage?

KK: We partner with Andrology Labs in Chicago on analysis; it’s one of the top fertility labs in the country. For storage, we partner with a couple of cryo-storage providers in different geographies. We divide the samples into four, then store them in two different tanks within each of two locations. We want to make sure we’re never in a position where [the samples are accidentally destroyed, as has happened at clinics elsewhere].

TC: I can imagine fears about these samples being mishandled. How can you assure customers this won’t happen?

KK: Trust and legitimacy are core factors and a huge area of focus for us. We’re CPPA and HIPAA compliant. All [related data] is encrypted and anonymized and every customer receives a unique ID [which is a series of digits so that even the storage facilities don’t know whose sperm they are handling]. We have extreme redundancies and processes in place to ensure that we’re handling [samples] in the most scientifically rigorous way possible, as well as ensuring the safety and privacy of each [specimen].

TC: How long can sperm be frozen?

KK: Indefinitely.

TC: How will you use all the data you’ll be collecting?

KK: I could see us entering into partnerships with research institutions. What we won’t do is sell it like 23andMe.

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And the winner of Startup Battlefield at Disrupt Berlin 2018 is… Legacy

At the very beginning, there were 13 startups. After two days of incredibly fierce competition, we now have a winner.

Startups participating in the Startup Battlefield have all been hand-picked to participate in our highly competitive startup competition. They all presented in front of multiple groups of VCs and tech leaders serving as judges for a chance to win $50,000 and the coveted Disrupt Cup.

After hours of deliberations, TechCrunch editors pored over the judges’ notes and narrowed the list down to five finalists: Imago AI, Kalepso, Legacy, Polyteia and Spike.

These startups made their way to the finale to demo in front of our final panel of judges, which included: Sophia Bendz (Atomico), Niko Bonatsos (General Catalyst), Luciana Luxandru (Accel), Ida Tin (Clue), Matt Turck (FirstMark Capital) and Matthew Panzarino (TechCrunch).

And now, meet the Startup Battlefield winner of TechCrunch Disrupt Berlin 2018.

Winner: Legacy

Legacy is tackling an interesting problem: the reduction of sperm motility as we age. By freezing men’s sperm, this Swiss-based company promises to keep our boys safe and potent as we get older, a consideration that many find vital as we marry and have kids later.

Read more about Legacy in our separate post.

Runner-Up: Imago AI

Imago AI is applying AI to help feed the world’s growing population by increasing crop yields and reducing food waste. To accomplish this, it’s using computer vision and machine learning technology to fully automate the laborious task of measuring crop output and quality.

Read more about Imago AI in our separate post.

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Meet the five Startup Battlefield finalists at Disrupt Berlin 2018

Thirteen companies took the stage today at Disrupt Berlin, delivering six-minute pitches and demos, then answering free-for-all questions from expert judges. Now that the judges have given us their feedback, we’ve chosen five finalists.

These finalists will all take the stage again tomorrow afternoon to present in front of a new set of judges, who will have time to ask more in-depth questions. Then one winner will be chosen to take home the Disrupt Cup — not to mention $50,000, equity-free.

Here are the finalists. The competition will be live-streamed on TechCrunch starting at 2:05pm Berlin time on Friday.

Imago AI

Imago AI is applying AI to help feed the world’s growing population by increasing crop yields and reducing food waste. To accomplish this, it’s using computer vision and machine learning technology to fully automate the laborious task of measuring crop output and quality.

Read more about Imago AI here.

Kalepso

Kalepso says it can do better than other database offerings out there by melding strong security with high reliability, while filling in the spots where sensitive data can be accessed or obtained in the clear. Its Harvard-educated founders argued that all the existing database services out there are either slow or insecure.

Read more about Kalepso here.

Legacy

Legacy is tackling an interesting problem: the reduction of sperm motility as we age. By freezing men’s sperm, this Swiss-based company promises to keep our boys safe and potent as we get older, a consideration that many find vital as we marry and have kids later.

Read more about Legacy here.

Polyteia

Polyteia is building a platform that would allow city leaders to unify and analyze the data that represents the constituents they serve. The problem, the company says, is that local governments collect a lot of data, but they aren’t always great at organizing and using it efficiently.

Read more about Polyteia here.

Spike

Spike lets family and doctors lend a hand to diabetes patients by sending them real-time alerts about their stats. And the app’s artificial intelligence features can even send helpful reminders or suggest the most diabetes-friendly meals when you walk into a restaurant.

Read more about Spike Diabetes here.

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Legacy freezes your sperm so you don’t have to

Legacy is tackling an interesting problem: the reduction of sperm motility as we age. By freezing our sperm, this Swiss-based company promises to keep our boys safe and potent as we get older, a consideration that many find vital as we marry and have kids later. Legacy, which exhibited in Startup Alley at Disrupt Berlin 2018, was chosen as the wildcard company to present its services onstage during Startup Battlefield.

How does it work? Well, the company delivers a system for grabbing sperm. The material is kept in a specially made container and shipped to a nearby clinic where they then test the sperm and place it in cryogenic storage. You can then make a withdrawal when you’re ready for babies.

“Our unique at-home solution allows men to have their sperm analyzed and frozen at a clinic without leaving their home or having to meet with a physician,” said founder Khaled Kteily. “All clients receive a full fertility analysis, including personalized recommendations using our machine learning-driven technology.”

Kteily ensures us that our special sauce will stay safe over the years.

“Our core values of privacy, quality, and security ensure discretion, anonymity, and the highest level of quality for all our clients, including multi-site storage, whereby our clients’ deposits are stored in multiple tanks in multiple locations at high security.”

The company offers three packages: Bronze, Gold and Platinum. The $1,000 Bronze package requires you to take your sperm to a clinic where it will be tested and cryogenically stored. The Platinum plan costs $10,000 and ensures the company will keep up to six samples of your swimmers indefinitely, affording your genetic material practical immortality.

Kteily founded the company after a friend looked for solutions to sperm storage while facing cancer treatment. Realizing there was nothing that looked trustworthy or usable, he used his background in health and entrepreneurship to build Legacy.

The company has raised $250,000 and they are profitable. Kteily sees his company as the “Swiss Bank” of sperm storage.

“Male fertility has declined by 50 percent. Every 8 months, men produce a new genetic mutation that gets passed on to their children. Birth rates around the world are plummeting and men are responsible for infertility in 30-50 percent of couples. Meanwhile, you can freeze sperm indefinitely with no loss in quality — through Legacy, without having to leave your home and at a tenth of the cost of egg freezing,” he said. “We treat our clients as a private bank would — our core values of quality, privacy and security ensure our clients are taken care of at every level.”


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Sapho gets $14M more to make legacy software more useful with ‘micro apps’

 In recent years, Microsoft, Facebook and Slack (and many more) have all built new productivity platforms for workers to integrate and communicate about dozens of other API-enabled enterprise apps, but what about productivity tools for those enterprises that have no appetite or budget to rip out and replace software that they’ve been using for years? Well, there’s an app for… Read More

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