Multiple sources close to the business of Ro, a direct-to consumer health company, are nearing a deal for Dadi's at-home sperm storage startup. This would be Ro's fourth acquisition within the last 12 months, following Workpath, Kit, and Modern Fertility.
Although the deal is close, it could still fail. Although it is not clear how big the deal is, one source estimates that it will close at $100 millions. Ro and Dadi didn't immediately respond to a request for comment.
Dadi launched in 2019 with a temperature-controlled at-home fertility test and sperm collection kit, with a mission to remind men that "infertility isn't a women's issue, it's both a men's and women's issue," according to co-founder and CEO Tom Smith. According to Crunchbase, the startup has raised $10 million in venture capital from investors like firstminute Capital, Third Kind Venture Capital, and The Chernin Group.
Dadi's closest competitor in venture capital is Legacy, which has also raised venture capital to fund a sperm testing and freezing service. Legacy was awarded TechCrunch's Startup Battlefield award at Disrupt Berlin 2018, and has raised more than $20 million from investors such as FirstMark, Y Combinator, and Justin Bieber.
Ro is experiencing rising tensions as former and current employees claim that Ro has been struggling to meet the new demands of its growth-stage goals. Some employees have left the company since then, claiming that Ro's pursuit of rapid growth instead of fixing culture or operations for the long-term teams was the tipping point.
TechCrunch interviewed a recently fired employee about the pace of deals. "We have never integrated with any of the companies we've acquired. So what are we doing here? These acquisitions would cause the company's focus to shift and leaders would tell us that this is a growth company.
Two of Ro's most recent acquisitions appear to be in sync with Dadi when compared to strategy. Kit, which Ro bought in June is an at-home diagnostics firm with a variety of customizable products. These include finger prick blood tests and weight measurement tools. Similar to Dadi's startup, the startup aims to make it easier to take control of your health from the comfort of your own home.
Ro co-founder Zachariah Reitano said that Kit's acquisition caused a "fragmentation in care," fragmentation in data, and providers aren’t kept in the loop. We have so much to do. Kit is an essential and important piece of that infrastructure to bring more patient care under one roof.
Ro's apparent attempts to enter the fertility market, highlighted by its $225 million purchase of Modern Fertility, will be supported by Dadi. Modern Fertility, which is led by Carly Leahy & Afton Vechery offers a home fertility test for women and a range of personalized support for reproductive issues.
Ro was founded in men's health and focuses on erectile dysfunction. The ED line still accounts for half the revenue of this health tech unicorn.