FUNDING GAP
Breast-pump startup faces hurdles from male investors,
Before her first meetings with venture capitalists, Janica Alvarez thought she could have a professional discussion about breasts.
Alvarez was trying to raise money for her startup Naya Health Inc., which makes a smart breast pump. Naya has secured approval from the U.S. Food and Drug Administration, achieving that milestone much earlier than most young companies.
But the conversations weren’t what she expected.
Investors wanted to know how she’d be able to run a startup while also raising her children. Another commented on her body and asked how a mother of three stays in such good shape.
Others said they were too grossed out to touch her product or pleaded ignorance about how a breast pump works. “Investors would say, ‘Let me go talk to my sister; let me go talk to my wife,’ ” Alvarez said.
She and her husband, Jeffrey Alvarez, managed to raise $6.5 million from investors after starting the business together in 2013.
But they’ve recently hit a wall. With few VCs willing to fund the product, they’re turning to Kickstarter in the hopes of keeping their company running. The campaign, with an initial goal of $100,000, is expected to start Thursday.
“If VCs don’t want this, then we know parents and mothers do,” Alvarez said.
The breast pump market is dominated by Swiss manufacturer Medela LLC, which got a boost in the U.S. from an Obamacare mandate that insurance companies must cover the cost of pumps for new moms. Most devices use hard plastic cups and an air suction system. They’re often loud and sometimes painful.
The Naya’s soft suction cup mimics the feel of a baby’s mouth and distributes the suction over a broader area of a woman’s breast.
Like most VCs Alvarez met with, Charles Hudson didn’t know anything about breast pumps. Hudson, a managing partner at Precursor Ventures, said he decided to make a seed investment in Naya after doing some research with moms.
“We were expecting our first child and I started asking around and asked, ‘Do you like your current product?’ ” he said. “Everyone said no.”