Funding families, with John Aronica
"Roughly 15% of hopeful parents worldwide would be eligible for IVF - from a medical eligibility perspective - but today, only about 2% are able to access that care."
It's all well and good financing cars or boats or sneakers, but sometimes we get a chance to finance something a little more important, like a house or, in this case, a family to fill it. Gaia are a wonderful example of that, embedding finance and insurance into a healthcare workflow to build the better way to pay for IVF.
Gaia are at https://gaiafamily.com/
On LinkedIn they're over here: https://www.linkedin.com/company/gaiafamily/ and they're on Facebook, TikTok, and Instagram, too
John is on LinkedIn, too, at https://www.linkedin.com/in/john-p-aronica/
As am I, and I am always open to new genuine connections - https://www.linkedin.com/in/brendanlegrange - please also follow the show's page while you're there.
Meanwhile, my action-adventure novels are on Amazon, some versions even for free, and my work with ConfirmU and our gamified psychometric scores is discussed at https://confirmu.com/ and on episode 24 of this show https://www.howtolendmoneytostrangers.show/episodes/episode-24
And finally, I'm also co-creating a new podcast called hAIghtened senses which will look at the intersection between human senses and technology, especially AI-powered technology. You can already start to follow it wherever you're listening to this one - there's only a trailer there at the moment, but we've recorded some of the early episodes and it's going to be a fun ride!
Keep well, Brendan
The full written transcript, with timestamps, is below:
John Aronica 0:00
A niche focus, but a focus that I think goes a long way towards helping families build from the ground up.
Roughly 15% of hopeful parents worldwide would be eligible for IVF - from a medical eligibility perspective - but today, only about 2% are able to access that care.
And we think one of the critical blockers is affordability, accessibility and the transparency of going through that process. It can be very difficult and financially onerous and financially worrisome to get yourself IVF.
So what we do is we fix the cost of treatment upfront. And if your treatment is successful, ie results in a live birth, then you pay off the amount of your treatment costs in the form of a relatively straightforward unsecured personal loan. But for members who, unfortunately, are not successful, this is where the insurance piece of product kicks in and all of those treatment costs go away.
Brendan Le Grange 1:14
This is probably too much information, but my first child was born almost exactly nine months after we got married. So let's just say we were lucky enough that we never had to take on the IVF journey.
But several of our friends have. And it's not an easy journey by any means. It involves a lot of emotional and physical discomfort, that for even more people, it's the starting That's the hardest thing because the monetary costs involved can be insurmountable.
Here in the UK, you can get IVF treatment covered by the NHS, but only after two years of unsuccessful attempts. And even then the waiting period is a few months to three years long. In the US if you're looking to pay out of pocket, you're looking at $15,000 to $20,000, a cycle of which most people will need two or three.
The fact that people do it at all shows how important having a family can be. And that's why I'm so happy to be hearing from Gaia today. Welcome to How to Lend Money to Strangers with Brendan le Grange.
John Aronica, Head of Finance at Gaia, welcome to the show.
John Aronica 2:37
Thanks so much, Brendan. I really appreciate you having me out.
Brendan Le Grange 2:40
Yeah, I'm looking forward to it because I think Gaia is this wonderful example of insurance and finance being embedded into a healthcare solution, but first talk to me a bit about your career roots and what you were doing before Gaia.
John Aronica 2:53
So to your point, Gaia exists at this really interesting intersection between health care insurance and lending and it aligns quite well with my own background.
So for the last nine years or so, I've worked as an operator or advisor in the FinTech space. I started my career in the space as a financial institutions investment banker, and subsequently went on to work internally at a few companies of various shapes and sizes in the FinTech space, including Future Finance, which formerly was a student lender focused on the UK, Ninja Holdings, which is a unsecured consumer lender and data analytics company based in the US, focused primarily on kind of the new subprime subprime segment, and SoFi, which is a neobank based in the US, primarily focused on the upper end of the credit spectrum.
And then of course, Gaia.
This FinTech world is something that I've had a lot of experience in and I was super excited to be able to lend my talents to the great team that we have here at Gaia
Brendan Le Grange 3:57
Future Finance, Ninja Holdings, and SoFi were all to some degree or another relatively new when you started. And now with Gaia again, how did you come to be focused, I guess, or just maybe just luckily end up in, but how did you come to be in the startup/ scaleup world?
John Aronica 4:14
I was aware as an investment banker working with companies of this size that this space existed. And so getting to flip over to the other side of the table and be on the operating side was always something that I was interested in. And when can my first opportunity to jump in at Future Finance arose, I was really excited to get in and actually build something and have a little bit more of a direct relationship with the work.
So the startup scale up world really attracted me for two primary reasons. The first is all about the people that you get to work with in these kinds of settings. And the second is the impact that you get to have working in these smaller startup scale up functions.
You get to work with really amazing teams. There just simply isn't enough money to go around for the people you work with not to be superstars at their jobs. So you end up working with a lot of really smart people who are just excellent at what they do. And every day is an opportunity to learn from them.
And the other thing is, is the impact side, at a company, when you're working with a relatively small team, everything that you do is magnified, every step that you can take towards pushing the team's values forward is going to be easy to measure, easy to see, which is very exciting and very rewarding. The other piece certainly is the impact that you can have on an industry or on your prospective customers or members.
For a company like Gaia, we have the opportunity to really be disruptive in the FinTech space, in the fertility space, and really make an impact on our members lives in a way that something you know, that's a unsecured loan, that's refinancing credit card debt just can't have. So that was super exciting to me to be able to get to work on something that's a little bit more meaningful, where the mission is a little bit more tangible, and has more near and dear impact,
Brendan Le Grange 6:07
Just a wonderful time to be in the FinTech world where you can be nimble and new on the ground, but also a household name, which I think is must have been wonderful to experience from the front lines.
And when we work in financial services we are, when we're doing it right, you know, helping people to bring their dreams to life. Absolutely. But there's something different with me, and it's operate at a different level in terms of the human impact, you know, we can talk about buying their dream house, so maybe a mortgage in the right situation comes close, or maybe a business loan for a startup comes close, but really Gaia's getting right in the in one of those fundamental aspects of humanity.
So talk to me a little bit more about what Gaia is doing, what that vision is, and what it was there that that sort of sucked you in and brought you across?
John Aronica 6:54
At Gaia, our mission is to make the process of IVF, more straightforward, more accessible, and more affordable. So the work we're doing is driving towards enabling more families to have children, and means we have the opportunity to make this truly tangible impact on our members lives.
And so it really is this mission, I think that elevates things beyond just another plain vanila financial services company.
It is a niche focus, but it is a focus that I think goes a long way towards solving this kind of very tangible problem of infertility and helping families build from the ground up. And so our product really is organised all around trying to focus on providing additional accessibility and affordability for IVF through a combination of a loan and an insurance product that allow for a an easier entry point for our members to get access to the street.
Brendan Le Grange 7:54
My wife and I were lucky enough that we didn't need to go the route of IVF. But I know from friends who have that it's confusing, it's stressful. It's uncomfortable. You know, the fact that people do it is a testament to the how important a role it's playing in their future and in what they want from this world.
But the fact is, it's very expensive, and it's not guaranteed to work. So yeah, I don't know if privilege is quite the right word, but certainly IVFs only been available to people who are financially privileged I could afford not just the cost of it, but that cost knowing actually, you may not get an end result you're looking for out of the process. And that's where the beauty of the Gaia product comes in this holistic embedding of solution.
So yeah, talk to me about how you've pulled us all together to create that better experience.
John Aronica 8:40
Yep, absolutely. And so to your point today, IVF is largely a good that is only accessible to a select few. Our product is offered in the UK market, but all use some stats from the US just to contextualise things as I have those numbers handy the average cost of a cycle of IVF. In the US inclusive of medication of consultations, the procedure itself is nearly $25,000. And successful pregnancy can require going through two or three such cycles, meaning that the price tag to having a child can be upwards of $75,000 if you're going through three cycles of IVF.
And so because of this massive expense, you see that this service is primarily being accessed only by folks who are on the upper end of the income spectrum in the US 80% of American couples undergoing IVF treatment, have household income in the top 3% of incomes in the US.
And we want to change that we want to take IVF and shifted from being a luxury product into something that is more accessible. And the way that we do that today is through this this financial product just to kind of give you a high level of how the product works.
First we fix the cost of treatment upfront. So instead of a prospective member having to go through the process of liaising directly with the clinic on costs, which often can spiral as additional pieces of treatment are required to be added on, and the natural capacity of working with healthcare system comes into play, it can be very difficult and financially onerous and financially worrisome to get yourself into a situation where you don't know exactly what you're paying for how much it's going to cost from the get go. So what we do is you have one transparent price that you're going to pay per cycle of IVF, in terms of the total costs, that amount isn't going to change, regardless of if you need add on treatments, or whatever. And we liaise directly with the clinic.
And so that first step is is creating clarity upfront through this fixed price. The second piece is we invite our members to make a protection fee payment upfront. So rather than paying for the full cost of IVF, treatment upfront that full cash costs, which can be very expensive $25,000 In the US, or about £9,000, on average, in the UK, we instead only require a protection fee, that's about 25% of that cost on average.
So for a few 1000 pounds upfront, you're able to begin treatment as a guy a member, lowering that upfront cost of treatment. From there as a member, you're able to go on your treatment pathway. And if your treatment is successful, ie results in a live birth, then you pay off the amount of your treatment costs in the form of a relatively straightforward unsecured personal loan over the course of up to eight years.
But for members who unfortunately, are not successful, that protection fee that they paid upfront, buys them a little bit of peace of mind, as if they go through three complete cycles of IVF and are unable to have a pregnancy and successfully deliver a live child, then all of those treatment costs go away. And the only amount that they have to pay is that protection fee, which they've already paid upfront. This is where the insurance piece of the product kicks in, and effectively pays off the cost of treatment on their behalf.
So it's it's a cool product. It's a little bit complex, admittedly, to explain. But fundamentally, we think we're providing a lot of value through creating kind of a lower cost entry point by fixing the cost upfront and providing clarity, and then providing protection to ensure that our members are not paying for the treatment cost themselves. They're paying for their desired outcome, which is which is having a child.
Brendan Le Grange 12:52
Yeah, and I mean, we've mentioned a few times, I think now, the hugely positive impact this can have in someone's life. But I guess that has a weight of responsibility that comes with that. You know, the way you've designed it helps ease that trauma when when things don't work bad. I guess there's also a question on when it's a frivolous spender, just a credit card, you can say no to a consumer and let's just move on to the next one. When you have an applicant come to you that's got these big, important dreams. And they don't qualify, I guess it makes that a more complicated emotion, I suppose for you to think through as an organisation. Absolutely.
I've actually was looking around on the website in preparation for this. And I see even in that aspect, you've built some, some roots in and some some tools to help people who maybe don't qualify today to see what it is that they're not qualifying on. Often it's passed on to you, obviously from the medical providers, but you even helping consumers in that space, okay, this is what you need to do, to come in.
John Aronica 13:55
Absolutely. Yep. And what I'll say is, I think it is such a big decision. It is such a critical part of our prospective members lives, that they're coming to us for help with their dreams of having a child. And it's something that we take really, really seriously.
So to your point, we've put together a lot of great educational materials on our website to try to help our prospective members to understand what they can do if they don't qualify today or what things are likely to make them more likely to qualify.
But unfortunately we do you have to make cut offs in some places, our underwriting process, both on the insurance side and on the credit side have to take into account a lot of factors including, you know, what does the medical history of the prospective members look like? As well as, hey, what does the credit bureau data look alike and affordability information where we're utilising open banking data provided by our members to make determinations on Hey, what does your income look like? What your recurring obligations look like? And what will those occurring obligations look like? inclusive of the cost of, you know, our alone as well as the increase in non discretionary spend that comes along with having a child.
Brendan Le Grange 15:16
yeah, a uniquely complex affordability question is where is sort of almost by default, you're having to factor in a massive life change and 18 years of ever increasing expense? Absolutely.
So any any traditional unsecured lender who's sitting there trying to incorporate open banking into their processes to decide on a $5,000 credit limit should thank their lucky stars, that they're just looking at normal speed and increasing our inflationary rates. Exactly.
You talks about the educational stuff, they I think that's kind of the third key pillar for me that you've got the financing, to reduce the hurdles to start the treatment, you've got the insurance to ensure that they're paying for an outcome. And they're not suffering financial trauma and human trauma at once.
But the third part is this community, you're managing to build around the product through your own education, but also in sort of the way you're connecting people because it is, as we said, uncomfortable, but also confusing. All medical procedures have that aspect of nerves and confusion to those of us from from outside the medical field. And this is no exception that there's so many long words to read so many things to think about. And when you're going in, what's going to happen to me, what does this all mean?
That's a vital aspect of it that I think many lenders don't embed as well, when they're thinking about, Oh, we're going to embed some financing on some insurance. It's also about building that community. And from my side looking in, it looks like something you've actively set about to do.
John Aronica 16:51
Absolutely, yeah, I would say one of our key goals is to be more than just a financial product to our members, we really want to be a partner who is working with them side by side soup to nuts throughout their fertility journey. And to that end, we spent a lot of time on the phones with our existing members, as well as our prospective members, whether that's helping them through the application process, answering questions about their quote, we recently updated our quote page to embed an explainer video from one of our great members of our members support team just to try to make sense of things and speak in plain English about what exactly this quote means.
We've also recently even made some changes to our application flow to try to capture those prospects who are earlier maybe in their fertility journey, who haven't yet had a consultation with a clinic or haven't really gotten a chance to understand what the costs of IVF is.
And so we through some early questions in our application flow, invite those prospects to speak on the phone with our member support team, to allow them to actually chat with a real person about what the process looks like, give them that high level early understanding so that they can take that next step, even if that next step is going out to a clinic who we aren't necessarily affiliated with, we do ultimately want to provide a concierge level of service to our existing members as well as our prospective members, both in terms of getting them through the initial steps of starting their fertility treatment, as well as the ups and downs that come along with going through treatment itself.
So we try to go the extra mile a little bit, whether it's sending a box gift to our members, when they are able to successfully have a child or sending constellation flowers in the case that their cycle is is unsuccessful. So it's all about providing this very high touch service and trying to be more of a partner than a transactional relationship that's only a one time thing.
Brendan Le Grange 19:02
Yeah. And I guess you're as complicated as the affordability question is when you know someone's looking to have children, the conversation piece is perhaps even more complicated because we're talking about aspects of personal finance and money and aspects of fertility that are on their own topics that people might be quite shy about speaking to with their friends and family, but you're dealing with consumers who might be looking for that person to speak to that first conversation to say absolutely, how does this work I told her what to expect having that place you can go to their sales come talk to us might be what they need instead of going out and just asking everybody they meet if they know anything about it.
So I think a wonderful example of sort of a finance business doing good for its customers add so Yeah, John, I think uniquely, we may have people listening that are interested in looking at Gaia as a customer or just taking some lessons of how you've put together your product.
So If anybody listening is interested in Gaia and learning more, where should they go online to find you guys to see what you're doing to read some of your content, things like that?
John Aronica 20:10
Yeah, absolutely. So you can find us online at our website, www.gaiafamily.com
You can also find us on Instagram at Gaia family official Facebook gaiafamilyofficial, tick tock gaiafamily official. And on LinkedIn, you can find us as just Gaia ,
Brendan Le Grange 20:31
perfect. I'll put links to all of those in the show notes as well, to make it easy for people appreciate it. Before I let you go, I'm sure you've got some big ambitions. I'm speaking to you today in Chicago. I don't know if there's any clues in there. But what our guy has plans for sort of the next few years.
John Aronica 20:49
Our product is currently offered only in the UK today. But fertility and affordability of fertility services is an issue that extends beyond the UK exporters. So nothing to say specifically today, but you know, we are certainly looking at other markets where we think we can help serve this need.
This product today is something where there there just are some prospects which we have to turn down. And the deeply personal nature of this product means that each time that we have to turn someone down for our services, it hurts. So we are spending a lot of time trying to figure out different levers that we can push on how we can evolve the product offering that we have beyond the existing structure to capture and drive towards our primary mission, which is making IVF and fertility services more broadly accessible and more broadly available.
So we spend time thinking about how we can negotiate with our capital providers, as well as clinics to make our existing product offering cheaper, as well as dreaming up new products and new modalities of service that can allow us to get a little bit deeper into that mission. So again, nothing really explicit that I can talk to you. But we've got some things going in the lab. And we're very excited. Yeah,
Brendan Le Grange 22:14
I'm really excited to I know guy started from a very personal story with the founders.
And I think that is reflected through in the way it's coming to market. From bundling all the things together to dealing with complex healthcare issues to dealing with complex human issues. To talking about finances and fertility to you have things I haven't thought about like you, you're essentially like an auto lender that would have to go back to the manufacturers and encourage them to build different types of cars to get the services available to their customers, you want to help.
So lots of complications that could have turned people away. But yeah, they've been brought together to market, I think in a wonderful way, in a way that most lenders should be able to look up to and say this is somebody genuinely helping their customers. There's a wonderful example of lending and lending and insurance down well. So it's been an absolute pleasure having you on John, and I'm just as excited about what's coming next with you guys.
John Aronica 23:12
Awesome. Thanks so much for the kind words, Brendan, it's been a pleasure getting to speak with you today.
Brendan Le Grange 23:16
And thank you all for listening.
Please do look for and follow the show on your favourite podcast platform and share the updates widely on LinkedIn where lending nerds are found in our largest concentration. Plus, send me a connection request while you're there.
This show is written and recorded by myself Brendan le Grange in Brighton, England and edited by Fina Charleson of FC Productions.
Show music is by Iam_wake, and you can find show notes and written transcripts at www.HowtoLendMoneytoStrangers.show and I'll see you again next Thursday.