Silicon Valley Bank (SVB) played a role in providing financing to companies in the fertility business. However, the impact of its recent failure on the sector appears to be minimal for now.

The Santa Clara, Calif.-based SVB failed on March 10, after its heavy investments in U.S. bonds were sunk by rising interest rates and inflation, eventually triggering a liquidity crisis and then a run on deposits. Its holdings are currently being managed by the Federal Deposit Insurance Corp.

FDIC has promised to make all depositors whole. And all lines of credit have been transferred to a stopgap facility called the Silicon Valley Bridge Bank, the FDIC said.

The bank, which was founded in 1983, had extensive involvement with the biotech industry, which is at the core of providing in vitro fertilization and other fertility services. SVB was involved in more than 250 investments with biotech and healthcare firms, according to data from Crunchbase.

“Silicon Valley Bank was generally focused on the tech space. For the most part, the folks in (the fertility space) are not quite like that,” said Robert Goodman, vice president of healthcare at MidCap Advisors, a New York City-based investment banking firm focusing on companies with annual revenue up to $250 million. However, Goodman noted that SVB was involved with some of the companies offering an all-in-one platform of fertility services.

SVB’s biggest investment in a fertility firm, that Inside Reproductive Health found, occurred in August 2021, when it was part of a consortium providing $75 million in Series C funding to Carrot Fertility, the Menlo Park, Calif. firm that provides services to health plans, self-funded employers and other entities, including major firms such as Slack and Peloton. Executives from Carrot did not respond to requests seeking comment about their financial future.

The bank also played a role in financing Progyny, a New York-based firm that like Carrot also offers fertility benefits to employer groups and other entities. It had a line of credit with SVB that was at least $15 million, according to a February 2022 report by the Australian financial information service News Bites. A Progyny spokesperson declined to comment.

SVB also played a role in securing financing for Oma Fertility. Last June, SVB provided the firm $8.5 million in credit. The announcement of the financing coincided with the startup’s unveiling of Oma Sperm InSight, a service guide with artificial intelligence that assists embryologists in identifying “the most promising sperm cell to pair with an egg in IVF,” the company said at the time. Oma was founded in 2020.

Along with the debt facility, Oma has raised an additional $29 million in series A funding. Oma executives declined to comment about its relationship with SVB and how it might impact the sector.

For now, the demise of SVB appears to have left a minimal footprint on the fertility sector. Goodman noted that the platform companies such as Carrot and Progyny are “pretty strong” financially and were not overly reliant on lines of credit or other bank services to keep their operations going.

Goodman also believes that SVB’s failure had virtually no impact on smaller practices offering financing services to patients. He added that patient finance is typically the realm of bigger financial institutions, such as Barclays Bank and Wells Fargo Bank, as well as credit card firms such as Visa.

“I’d be very surprised” if such financial services took a hit, Goodman said.

Executives from Oma Fertility declined to comment on the security of the company’s financial future.

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