Tammy Sun is a cofounder and the CEO of Carrot.
Five years ago when Tammy Sun was starting fertility treatments, she quickly realized how naive she had been to assume her employer-provided insurance would cover the costly process. “I was paying premiums,” Sun tells Forbes. “This is something I thought was core to my health and I was really surprised when my insurance card was rejected.” Sun ended up paying out of pocket for the treatments — a sum hovering around $50,000 for three rounds — and felt lucky she had the means to follow through. But the process left a question in her mind: was there a way to make this care more affordable and accessible? She wanted to find out, and in 2016 left her job as the director of partnerships at Evernote to see if she could figure out a solution.
Less than a year later, she and two cofounders — Dr. Asima Ahmad, who has focused her medical career on the reproductive health space, and Juli Insinger — launched Carrot, a multi-pronged fertility coverage program that companies can offer as a benefit. Four years in, the startup’s platform is available in 52 countries, has processed “tens of millions” of dollars in insurance claims, and counts large employers like Peloton, Box and Samsara as customers. The company is announcing its latest round of funding after seeing strong growth since the beginning of the pandemic, as consumers thought more about family planning and employers looked to bolster their health benefits.
San Francisco-based Carrot raised a $75m Series C round led by Tiger Global, with participation from OrbiMed and existing investors including F-Prime Capital, CRV, U.S. Venture Partners and Silicon Valley Bank, as originally published in Midas Touch newsletter. The round was mainly equity, with a little debt as well, to bring the startup’s total funding to $115 million. Carrot has seen its revenue grow 5 times in the last two years, but the company declined to provide specific revenue metrics. OrbiMed partner Peter Thompson says that Carrot’s mission resonated with him immediately, knowing that the majority of people have some kind of a connection to the daunting fertility sector. “This is still an evolving and new space for benefits and benefits management,” says Thompson who was introduced to Carrot by U.S. Venture Partners. “The opportunity to shape that space, in particular within the context of young families, at this point is open.”
Carrot’s main mission, Sun says, is to make fertility care as accessible as possible by bringing it out of the consumer sector and not treating it as only an issue for women. “For us, we believe that fertility is human healthcare, not just women’s healthcare,” she says. “We really wanted to bring it people, to employers that would encompass anyone, gay, straight, across all ages and all genders.” Because of this, Sun says the startup doesn’t just focus on covering treatments for infertility or fertility issues either, but takes an expanded view that includes surrogacy, egg freezing, and adoption services. Carrot’s branding is also intentionally designed to not be hyperfeminized as some others in the space have been.
The company also offers a “Carrot Card” program, which includes preloaded debit cards, to make the benefit more financially inclusive. “Truth is, most Americans don’t have $500 in savings, and the ability to pay first and be reimbursed later was always going to be a limiting factor,” Sun says. “[Carrot Card] allows them access to the financial benefit in a much more seamless way. If you think about the spectrum of income diversity, it’s really a way to make sure that accessibility was solved for.” The cards are designed to only work at in-network fertility clinics and providers.
Sun says regardless of what people think about it, the reality is that most people — especially in the U.S. — get their healthcare benefits through work. That’s why Carrot decided to go the B2B2C route, hoping to create the largest impact it could. Carrot can also serve as a tool for companies struggling to attract and retain talent coming out of the pandemic, Sun argues, citing a 2015 study by the Reproductive Medicine Associates of New Jersey that found 68% of adults would change jobs for a company with better fertility benefits. “We are very excited about a lot of the consumer activity, but for us, always since day one, it has always been about building a superior solution for modern employers so that they can bring it to consumers,” Sun says.
