Many people who want to have children cannot or should not have a pregnancy for many reasons. Gestational surrogacy can be a great option for those people—if they can handle the long wait times and can afford to pay for the expensive service. New York-based Nodal is trying to make the process less expensive, more transparent and faster.

Nodal is a marketplace for potential parents who can be matched with verified surrogates. Nodal founder and CEO Dr. Brian Levine told TechCrunch that his company wants to fix the industry’s supply and demand issues.

Nodal takes the same technology-based approach as life insurance companies to vet potential surrogates, Levine said, which speeds up the process and allows more surrogates to be available. The marketplace approach also provides transparency so parents have more control over the surrogate they are working with. Nodal also cuts costs for intermediaries and works with fertility benefit companies such as Carrot, Maven and Progyny to lower costs for potential parents.

Levine said Nodal is designed to help keep costs down, even for people paying out of pocket. Users pay a monthly fee of $500 until they find a match. The match facilitation is $15,000 and those monthly payments are reduced to that total. If users want Nodal to serve as a case manager, these services start at an additional $10,000. While it was still expensive, Levine said, before Nodal came out, his patients were spending up to $180,000 for all of it.

“We saved our intended parents over $5 million in taxes,” Levine said. “We have saved them over a century of waiting time because we run an average of 45 days to fit. The average in America is nine to 18 months. You can have a child on the Nodal platform before you get off the waiting list to a Nodal competitor.”

Levine knows the space well as a practicing physician with a specialty in obstetrics and gynecology. Nodal’s idea came to him in 2021, when New York became the 48th state to legalize gestational surrogacy; only Louisiana and Nebraska still do not allow the practice. While Levine was initially excited that the decision would open up opportunities for his patients in the state, that’s not exactly what happened.

“I was totally excited about the whole thing,” Levine said. “Very quickly I realized that it really was a broken system. The cost went from $75,000 to $150,000 overnight. The reason it became so expensive is because supply and demand took over. We are America’s largest fertility marketplace; it literally raised the price all over the country.”

The price increases did not benefit the surrogates, but rather lined the pockets of the matching agencies. Levine believed there had to be a way to improve this process for both parties using technology, which led him to work at Nodal; it is named after the protein that must be present in the uterus in order to carry a child.

The product officially launched in September 2022, is available in all 50 states, and has since matched 108 hopeful parents with a surrogate. The average clinic matches 25 a year, Levine said.

Now, the startup is announcing a $4 million seed expansion round led by NFX, which gives the company a post-money valuation of $15 million. The round also included Amplo, Liquid2 and Myelin VC, among others. The company raised a total of $8.7 million.

Levine said Nodal wanted to reach $10 million in annual recurring revenue before raising its Series A round. He added that it didn’t need to raise that round, but thought it made sense as a healthcare company to reproduction, amid uncertainty surrounding the results of Tuesday’s US presidential election.

“We didn’t know how they were going to influence this election,” he said. “It would be short-sighted not to grow for women’s health care before the world’s potential shifts to a very challenging time for reproductive health.”

The company will invest the funds entirely in the technology, Levine said. Nodal wants to increase its partnerships with fertility clinics as well, so that more people can easily turn to Nodal when looking to start a family.

Despite the demand, there appear to be no direct competitors for Nodal beyond traditional surrogacy agencies, which are still only scratching the surface. Levine estimated that the current system meets less than 10 percent of the total demand for surrogates, meaning Nodal can gain substantial market share. But he still has a long way to go.

“From a big picture perspective, what I hope people take away is that this is a company that is completely focused on transparency, speed and safety,” Levine said. “It’s unfortunate that the industry has gotten to where it is today. It’s opaque, analog, and weird. We recognize that we have an opportunity to really help people.”