The multi-vertical fertility company has been unable to raise significant funding since 2023.
BY RON SHINKMAN
New York City-based Kindbody has shut six clinics in the past year, its C-suite has taken on an uncommon structure and it is quietly trying to drum up $75 million in capital after prior raises for smaller sums failed.
Six clinics have been removed from the Kindbody website since March of last year, according to comparisons using the company’s current and archived directories. The shuttered sites are in Los Angeles; Columbus, Ohio; Miami; Philadelphia; Portland, Ore.; and Southfield, Mich. The Columbus and Miami clinics opened less than a year ago. Kindbody has also opened new clinics in San Diego, Newport Beach, Calif. and Charlotte, N.C. in early 2024 that have remained open.
There have also been uncommon changes within its C-suite. Kindbody founder Gina Bartasi returned to the company as CEO last June. The company then announced Bartasi’s departure just months later. Bartasi was replaced by an “Office of the CEO” comprised of three co-chief executives: President Gina Bruzzichesi, Chief Financial Officer Scott Bruckner, and Chief Business Officer Shilpa Patel.
“I’ve never seen anything like this before,” said Robert Goodman, vice president of healthcare for Midcap Advisors, an investment banking firm in New York City, of three co-CEOs. “It’s rare circumstances to even have two co-CEOs.”
Examples of co-CEOs in healthcare are rare. Electronic health record firm ModMed implemented such a structure last year. Amylyx Pharmaceuticals also has a co-CEO structure, although both are co-founders. The last major publicly traded healthcare venture to employ such a structure was California-based health insurer FHP back in the 1990s. That company was eventually absorbed into UnitedHealth Group.
Kindbody said in a statement from spokesperson Margaret Ryan that the arrangement was temporary while the company searched for a new CEO.
“The Office of the CEO works closely with the (Kindbody Board of Directors) to ensure the company continues to put patients first, as we refine our operations in order to support what has been our rapid growth over the past six years,” Ryan said.
Meanwhile, Kindbody – which has received more than $300 million in funding since its founding in 2018 – has not been able to raise significant funds since 2023. An attempt to raise as much as $50 million last year fell flat, and the company’s valuation may have dropped to as little as $400 million, from as high as $1.8 billion two years ago.
The company has quietly embarked on a $75 million raise through a new preferred stock offering to current preferred stock shareholders who either have a high net worth or are institutional investors, according to a Kindbody letter to shareholders, obtained by Inside Reproductive Health. Parties expressing interest in purchasing stock had until Jan. 29 to respond. It is unclear what the funding would be used for.
Ryan declined a request by Inside Reproductive Health for an interview to discuss the preferred stock raise and answer other questions about the company’s finances. “The information you are considering for publication contains multiple factual inaccuracies,” she said. “If published as is, it will present a misleading and incorrect account of the facts.” Kindbody issued a similar statement when BNN Bloomberg reported about its prior capital raise.
Goodman noted that Kindbody’s two-pronged business model of offering fertility services to individual patients and employer groups worked initially, but that something has caught up with the enterprise.
“Certainly they need money, but it depends on what they’re going to use it for as an indication of what kind of trouble they’re in,” Goodman said.
Kindbody originally declined to answer questions about office closures, and clarify related information on offices from their website.
After publication, Kindbody responded to Inside Reproductive Health with this statement: “Kindbody did not shutter clinics in Los Angeles, Miami, or Philadelphia. The company moved its Century City clinic operations to its Santa Monica Flagship in order to better serve patients in the Greater Los Angeles Area. The company did not open clinics in Philadelphia or Miami. We are constantly evaluating the needs of our patients across the U.S. As demand grows, we must continue to evolve where we serve our patients. This means consolidating some clinics, sunsetting others, and adding new clinics in new geographies. This is all part of operating a healthy, growing fertility network.”
