Ro to Acquire Dadi: Expanding into At-Home Sperm Storage

Ro Pursues Acquisition of Dadi, Expanding its Health Tech Portfolio

Ro, a health company with a valuation of $5 billion, is reportedly close to acquiring Dadi, a company specializing in at-home sperm storage. This potential deal marks Ro’s fourth acquisition within the last year, following the purchases of Workpath, Kit, and Modern Fertility.

While the agreement is nearing completion, it isn't yet finalized. The financial details remain undisclosed, though estimates suggest a transaction value of approximately $100 million. Representatives from both Ro and Dadi have not yet issued a public statement regarding the matter.

Dadi's Focus on Male Fertility

Founded in 2019, Dadi provides a temperature-controlled at-home fertility test and sperm collection kit. The company, led by co-founder and CEO Tom Smith, aims to highlight that infertility affects both men and women. To date, Dadi has secured $10 million in venture capital funding from investors including firstminute Capital, Third Kind Venture Capital, and The Chernin Group.

Dadi operates in a competitive market, with Legacy being its primary rival. Legacy also offers sperm-testing and freezing services and has garnered over $20 million in funding from investors like FirstMark, Y Combinator, and Justin Bieber. Legacy previously won TechCrunch’s Startup Battlefield competition at Disrupt Berlin in 2018.

Internal Concerns at Ro Amidst Rapid Growth

This acquisition occurs during a period of internal challenges at Ro. Current and former employees have expressed concerns about the company’s ability to manage its rapid expansion. A key issue cited is a perceived prioritization of acquisitions over improvements to company culture and existing operations.

One former employee, speaking to TechCrunch, described the acquisitions as feeling sudden and lacking integration. They questioned the purpose of the acquisitions if the acquired companies weren’t effectively incorporated into Ro’s existing structure. Leadership reportedly justified the pace of growth as inherent to a rapidly expanding company.

Strategic Alignment with Existing Acquisitions

However, the acquisitions of Kit and Modern Fertility appear strategically aligned with the potential addition of Dadi. Kit, acquired in June, is a diagnostics company offering at-home tests, including blood tests and weight measurement tools. Like Dadi, Kit focuses on empowering consumers to proactively manage their health from home.

Zachariah Reitano, Ro’s co-founder and CEO, emphasized the importance of Kit in consolidating patient care and data. He stated that Kit is a crucial component in building an infrastructure to provide more comprehensive care under a single platform.

Expanding into the Fertility Market

The potential acquisition of Dadi would further strengthen Ro’s position in the fertility market, building upon its $225 million purchase of Modern Fertility. Modern Fertility, led by Carly Leahy and Afton Vechery, provides at-home fertility tests for women and personalized support for reproductive health.

Ro initially established itself in the men’s health sector with a focus on erectile dysfunction. This area continues to generate a significant portion – approximately half – of the company’s overall revenue.