Two businessmen earned £250,000 through an illegal fertility company providing women with access to sperm donors, a court heard today.

In the first case of its kind, a jury was told that Nigel Woodforth, 43, ran the firm from the basement of his home in Reading, Berkshire, with 49-year-old Ricky Gage.

Nearly 800 women signed up to use the online service provided by the company, operating under various names including Sperm Direct Limited and First4Fertility.

Their website introduced would-be donors to women trying to conceive, Southwark crown court in London was told.

Philip Bennetts, prosecuting, said: "In short, the website introduced men who wished to supply sperm to women who wished to use the sperm to impregnate themselves in order to have a child."

The women, having paid an £80 joining fee and £300 to use the service, would then choose from a list of men before the sperm was delivered to their homes through a courier company at £150 per delivery.

Under the Human Fertilisation and Embryology Act 1990, a licence is needed to "procure, test or distribute" any sperm or eggs. The two men are the first to be prosecuted under the act.

Gage and Woodforth deny two charges of procuring gametes intended for human application.

They are accused of procuring sperm for one woman between March and June 2008, after she filled in an online form with her partner and paid fees to the pair. She received the sperm in June but did not get pregnant. The couple began to have doubts about the company when the anonymous donor's name was mistakenly revealed to them.

On the second charge, Gage and Woodforth are accused of procuring sperm between October 2007 and November 2008.

They had been warned by the HFEA that they would need a licence to operate the company under rules introduced in July 2007. The law was brought in to ensure that donors and women wanting to conceive had access to information and counselling, and to help protect against the risks of diseases including HIV.

Gage and Woodforth were arrested in April 2009 after an undercover police investigation. A male officer posed first as a potential sperm donor, and then as a woman called Angie Williams, seeking a donor.

The court heard that the pair's website promised women a "life-changing opportunity". A message to potential clients read: "You have taken the first step towards letting us help you try to fulfil your dreams of the baby you have always longed for. We offer women a life-changing opportunity towards motherhood."

Women were allowed to choose the ethnicity, height, hair colour and even hobbies of the sperm donor they wanted to use. They could then contact the donor and arrange for the delivery of his sperm to their home, either for self-insemination or through IVF. Recipients were advised to negotiate the payment of expenses to the donor, and to arrange medical tests, themselves.

Papers found at Woodforth's home revealed that they earned up to £17,000 a month from the business. A list with details of 792 clients was recovered, and it was estimated that between October 2007 and November 2008 the pair earned nearly £250,000.

Both defendants claim they operated an introduction service and did not need a licence as stipulated by the 1990 act.

Bennetts said: "The prosecution asserts that the activities of the defendants brought them within the act and a licence was required. The defence say not so – the company acted as an information site and an introduction database. The users of the site made their own private agreement."

The trial is expected to last for up to five days.