Funding the New Standard in Maternity Care

Maverick Ventures co-leads $28M Series B investment in Oula Health

Our team at Maverick could not be more excited to partner with Oula, the New York-based startup reimagining maternity care. Oula operates maternity clinics and offers tech-driven, team-based services. Unlike many traditional healthcare models, Oula puts patients in the driver's seat of their own care journey. Oula has proven its model in New York City, having delivered 1,500 babies at Mount Sinai while outperforming benchmark outcomes (including lower rates of caesarean sections and preterm births).?As part of this $28M Series B raise, Oula will expand into new markets and launch additional tech-enabled services.?

Like my colleagues who have known Adrianne - Oula’s CEO - since the company’s seed round, I was impressed with the scale of her ambition from our first meeting. Instead of band-aiding a broken system, she wanted to rebuild maternity care from the ground up. After spending time with Adrianne and her co-founders Elaine and Joanne, we knew they were the right people for the job. We can’t wait to partner with them as Oula sets a new standard in women’s health.?

What makes Oula different??

When I visited Oula’s Soho clinic, I was welcomed into a space that felt more like a homey living room and nothing like a sterile hospital. The waiting room was full of expecting families, and the clinic was staffed with OBs and midwives who were funneling in and out of exam rooms in their scrubs. I met an ultrasound technician who had just finished scanning a patient. The clinic exudes comfort and warmth, but also maintains its identity as a rigorous medical center. Achieving this balance is delicate but critical. ?

When patients leave Oula’s physical space, they continue to engage with their care team through a consumer app and virtual wraparound services, including maternal health and group support. Oula’s providers spend twice as much time with patients compared to a typical OB. ?

Oula provides families with a single "home" - both in-person and virtual - for?all prenatal and postpartum care. Oula babies are delivered at hospitals, which ensures families have access to all forms of necessary care during childbirth. There is no membership fee, and patients can pay for Oula with insurance - including most major commercial insurance plans and Medicaid.?

The result? ?

1. Patients love it. Oula has a Net Promoter Score (NPS) of 90+ compared to 38 for the average healthcare provider. ?
2. Payors love it. Oula lowers costs by reducing caesarean sections (C-sections) by 26%, preterm births by 61% and low birth weights by 50%.?
3. Providers love it. Oula helps hospitals generate patient loyalty and improve profitability by increasing volumes of maternity patients and decreasing costs.?

What's a midwife, anyways??

If the word "midwife" sparks an image of a home water birth for you, you're not alone. I was surprised to learn that 94% of midwife births happen in a hospital (Birth Settings in America).

This perhaps shouldn’t have come as a surprise considering midwives are highly trained medical specialists. It takes 6-8 years to become a Certified Nurse-Midwife (CNN) which includes earning a master's degree and passing a rigorous Midwifery Certification Board licensing exam. The Commonwealth Fund reported that midwives can deliver 80% of essential maternal care when integrated into a health system. ?

I now understand that the bias against midwives is a uniquely American one. In fact, midwifery is standard in many other developed countries. In wealthy European nations, there are 25-66 midwives per 1,000 births, compared to 4 per 1,000 in the U.S. ?

These same countries eat our lunch on outcomes. They outperform the U.S. on 56 - yes, 56 - different outcome measures, including maternal mortality and preterm birth rates. (Yale study)?

Across the pond, the ratio of midwives-to-OB/GYNs is 11 times higher in the U.K. than in the U.S. Perhaps the most telling example: in comparison to the U.S., New Zealand has?approximately 11 times more midwives per 1,000 births and a 10 times lower maternal mortality rate. ?

The need for more midwives is a global phenomenon and even more pronounced in developing countries. Based on WHO data from 2021, there is a?shortage of 900,000 midwives worldwide. Midwives and nurses together make up 50% of the global shortage in health workers. “Fully investing in midwives by 2035 would avert roughly two-thirds of maternal, newborn deaths and stillbirths, saving 4.3 million lives per year,” the WHO reported. ?

Among the 11 developed countries listed below, the U.S. lags on midwifery supply…?

…while performing worst on maternal mortality rates:?

What about OB/GYNs??

Midwives work most effectively when they are part of a collaborative care team that also includes obstetricians. Furthermore, high-risk pregnancies – which occur in 6-8% of patients – require an OB/GYN and other specialists for prenatal care and delivery.?

Data shows that midwife-assisted care is associated with better outcomes, including 80% lower maternal and newborn mortality rates and higher patient satisfaction. A recent Yale study found that first-time mothers were 74% less likely to go through induced labor when midwives were on their care team compared to mothers who gave birth at medical centers without midwives. They were also 75% less likely to receive oxytocin augmentation and 12% less likely to deliver by cesarean.?

Oula offers the best of both obstetrics and midwifery and is positioned to become the largest employer of midwives in the U.S.?

Why now??

We believe Oula is the early leader in a space experiencing a confluence of:?

1. Shifting consumer preferences in favor of low-intervention births?
2. A shortage of OBs leading to bottlenecks in prenatal care ?
3. Increased attention from payors on poor maternal outcomes ?
4. Competition between hospital systems to acquire maternity patients?
5. Attractive margins driven by technology and lower fixed costs?

I’ll break these down below:?

(1) Shifting consumer preferences in favor of low-interventions births ?

• In a 2018 survey, 74% of women said they wanted a less medicalized approach to birth, up from 45% in 2002.?
• Between 2003 to 2018, U.S. hospital births dropped overall by 9%, while midwife-attended hospital births increased by 12% and physician-attended hospital births decreased by 10% (study).
• In our diligence, we surveyed pregnant women and new moms who indicated that they are looking for less medicalized, more consumer-friendly options.

(2) A shortage of OBs leading to bottlenecks in prenatal care?

• Hospitals are losing maternity patients because of labor capacity constraints leading to long wait times for prenatal visits. ?
• Research indicates that the U.S. faces an 8,000 shortage of OBs, which is expected to grow to 22,000 by 2050 (Doximity).?
• A 2022 March of Dimes report classified 36% of states as “maternity deserts”, meaning they have no obstetric hospitals or birth centers and no obstetric providers. ?
• The aging OB workforce is increasingly opting out of labor & delivery to focus on GYN care. Only 16% of all U.S. OB/GYNs are 40 years of age or younger, while 36% are 55 years or older (Doximity).?

(3) Increased attention from payors on poor maternal outcomes?

• Per CMS, “Despite spending more per capita on maternal health care than any other nation, the U.S. has disproportionately high rates of adverse pregnancy outcomes compared to other high-income nations.”? ??
• Our diligence calls with payors indicated that maternal health - particularly high C-section rates - is a top priority for them.?

• On December 15, 2023, CMS launched a new care delivery model called Transforming Maternal Health (“TMaH”) to address maternal health outcomes and increase pregnancy and postpartum care access. The model calls for a "whole-person approach to pregnancy, childbirth, and postpartum care access...address barriers that limit access to valuable resources, such as midwives, doulas, and perinatal Community Health Workers (CHW).”?

(4) Competition between hospital systems to acquire maternity patients?

• Hospitals compete fiercely for maternity patients because this episode of care is viewed as a critical time to acquire a family for downstream care.?
• Hospitals are looking for partners to introduce new midwifery care models. We spoke to various hospitals that have tried, and failed, to build this themselves.?

(5) Attractive margins driven by technology and lower costs?

• Oula’s proprietary technology stack and lower fixed cost structure enable higher margins and profitability for both Oula and its hospital partners.
• I believe the market will see strategic value in a business that owns the patient relationship and delivers hybrid care (both in-person and virtual) - and can move the needle on consumer experience, outcomes and cost. This lends itself to a tech-enabled services model like Oula’s. We’ve studied many such models at Maverick, and we think Oula’s is best in class.?

Why Maverick??

Maverick co-led this round with Revolution Ventures, alongside GV and existing investors including 8VC, Chelsea Clinton and Female Founders Fund. Maverick was an early investor in One Medical, and we are eager to apply our experiences as Oula scales its clinics into new regions and launches additional services. This investment fits into Maverick's strategy of expanding our East Coast presence and partnering with companies?that can scale their technology and services into broader geographies, including emerging markets where the need for innovative women’s health services is in high demand.?

On a personal level, I am thrilled to be part of Maverick's first investment in the women's health space. Before joining Maverick, I was on the founding team of a venture-backed healthcare startup building software and hardware for fertility clinics and saw first-hand the massive need for better reproductive care in the U.S. and abroad. Oula is helping to fill this gap by building a patient-centered, midwife-driven maternity care model, and I am honored to be part of that journey.?

The views expressed herein are solely the views of the author(s) and are not necessarily the views of Maverick Capital, Ltd. or any of its affiliates. This article is not intended to provide, and should not be relied upon for, investment advice.?