Health Startup Folx Raises $30 Million as GOP Tries to Limit LGBTQ Rights

(Bloomberg) -- Folx Health, which seeks to expand access to healthcare for LGBTQ people, completed a $30 million funding round Wednesday, attracting support from investors amid a push by Republican lawmakers across the country to limit the community’s rights.

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The money will go toward launching support groups for LGBTQ people interested in family planning, Chief Executive Officer Liana Douillet Guzmán said in an interview. The company, which has raised a total of $59.4 million, already offers its members virtual primary care consultations as well as prescriptions for drugs including hormone replacement therapy and birth control, and rolled out an employer-subsidized healthcare option in June.

All of these expansions serve “the full spectrum of our community's needs,” said Douillet Guzmán. “The enterprise play for us is really about being able to increase the number of people who have access to this very important care.”

A survey of transgender and gender non-conforming people by the National Gay and Lesbian Task Force and the National Center for Transgender Equality showed 19% have been refused healthcare because of their gender status. Such stigma can cause people to avoid going to the doctor altogether; a survey conducted by Folx found that 71% of members previously avoided care because they worried about being discriminated against.

Republican lawmakers’ escalating attempts to limit LGBTQ health care and rights may compound that fear. About 60% of proposed bills that center on LGBTQ health care in the 2022 state legislative year have attempted to ban or limit transgender-related healthcare, and other GOP leaders are doubling down on barring transgender children from receiving affirming care or playing in sports leagues that align with their gender identity. Folx and its backers hope that their funding round can serve as reminder that they and others are committed to providing care even as it’s being attacked.

7wireVentures and Foresite Capital led the latest fundraise, and 7wireVentures’ managing partner, Lee Shapiro, will join Folx’s board of directors. Bessemer Venture Partners, Define Ventures and Polaris Partners, investors in the company’s $25 million haul in February last year, also participated.

“The need and frankly, the demand, for culturally competent care for the LGBTQIA+ community is a paramount need right now,” said Shapiro. The Folx telehealth model, which includes lower price points for pre-exposure prophylactic drugs that prevent the spread of HIV, can help “serve communities who have been underserved by some of the systemic racism and and cultural bias that exists in our existing healthcare system,” he said. Such prescriptions can cost as much as $2,000 a month without insurance.

The company is raising money at a time when investors have been slower to write checks for startups. Funding for digital health companies was down 32% in the second quarter from the first three months of the year, according to research firm CB Insights. Plume, another telehealth startup focused on transgender care, raised $24 million in August from investors including Transformation Capital and General Catalyst. Plume has raised nearly $46 million, according to research firm Pitchbook.

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