The news: Virtual and in-person fertility clinic network and unicorn Kindbody acquired Alternative Reproductive Resources (ARR), a Chicago-based gestational surrogacy agency.

Kindbody’s acquisition tear: In February, it acquired Vios Fertility Institute and its network of clinics.

• The deal gave Kindbody ownership of 26 new clinics across the US, and pushed the fertility startup to unicorn status.
• The Vios acquisition built upon Kindbody’s existing services including telehealth and in-person visits for services like in vitro fertilization (IVF), genetic and fertility testing, and surrogacy/adoption services.

Zooming out on the macroeconomic environment: Kindbody’s acquisition is a bright spot as many health tech companies cut back on staff and pause growth to focus on profitability.

• Primary care startup Carbon Health, telehealth startup Ro, mental health entrant Cerebral, digital pharmacy startup Capsule, AI firm Olive, and healthcare payments company Cedar are just a few that have cut large portions of their workforces over the past two quarters.
• The layoffs indicate health tech companies are not recession proof, even when that company has reached a billion-dollar valuation.
• Plus, a drop in funding over the first six months of 2022 also means digital health companies can’t take as many risks as they did in 2021 (like scaling rapidly).

The big takeaway: Even in the era of uncertainty, fertility startups like Kindbody are striking M&A deals and nabbing VC funding from investors.

• For example, in April, women’s health startup Evernow raised nearly $29 million to support women through menopause.
• And in February, HerMD raised $10 million in Series A funding to open new clinics and expand their telehealth offerings.

Investors are likely gravitating toward fertility entrants because it isn’t a risky bet amid a pending recession. Financial uncertainty doesn’t appear to deter US adults’ desire to have children.

• Among the US adults that say they don’t want to have kids, only 17% cite “financial reasons” as their main concern, per an October 2021 Pew Research Center survey.