Investors ignore a huge subsection of technology because it is considered “taboo” – despite the fact that it is worthwhile. $1 trillion by 2027.
The FemTech sector encompasses all innovations designed to address health issues that are exclusively, differentially or disproportionately experienced by women. It covers everything from pregnancy and menopause health to Alzheimer’s and HIV.
Women make up more than 50% of the global population, which means the target market for products aimed at their health is huge. However, between 2011 and 2020, only 3.3% of digital health investment in the US was directed at women’s health, according to digital consultancy Rock Health.
And supporting innovation in women’s health doesn’t just benefit women.
Research by Women’s Health Access Matters, a nonprofit focused on funding women’s health research, suggests that a $300 million investment in improving women’s health could generate about $13 billion for the global economy.
Research by Women’s Health Access Matters suggests that a $300 million investment in improving women’s health could generate approximately $13 billion.
De Agostini Image Library | De Agostini | Getty Images
“Opportunities a potential for value creation investing in this area it’s huge,” Karen Taylor, director of research at Deloitte’s Center for Health Solutions, told CNBC.
“So I think if some of these investors did some more homework, they would understand why this is an area ripe for growth and investment.
“They just didn’t really get it”
Tania Boler created Elvie, a technology company focused on women’s health, in 2013 after noticing a lack of products designed for new mothers. Elvie’s main products are pelvic floor trainers and portable breast pumps.
But not everyone took her new business seriously.
“To be completely honest, the tech industry thought it was a joke,” Boler told CNBC.
“They just didn’t get it… [and] the problem with many women’s health issues is that there is a lack of demand due to a lack of education. From an investment point of view, it is not clear what the thesis is,” said Boler.
A personal understanding of the product is often key for investors, but statistics show that the majority of investment decisions are made by men. Report from 2022 European Women in VC, a collection of senior women in venture capital, found that only 15% of VC general partners were women.
Despite the obstacles, Elvie grew. It is now one of the largest companies in the FemTech space with $100 million in revenue. There are examples of women who have run marathons and had breast-pumping surgery using Elvie pumps, which CEO Tania Boler says highlights the human impact of investing in women’s health.
“We went with a very strong message of empowerment, but at the same time we’re confronting the taboo, we’re not shying away from it. And that starts the conversation,” Boler said.
The problem of misunderstanding women’s health—and the importance of women-specific health solutions—has deeper roots.
“Because it’s been such a taboo subject, it’s really hard to break through,” said Valerie Evans, a consumer investor at venture capital fund The Craftory.
“No, because [investors] I don’t want to know, and not because they’re being willfully ignorant, but I think it’s a general societal problem that kind of permeates the world of investing.”
And while the number of female investors is limited, the gender balance within corporate teams can also affect how difficult it is to get backing.
“It didn’t work to piss off feminists”
According to McKinsey & Company, more than 70% of FemTech companies have at least one female founder, compared to an average of 20%.
But that means the odds are stacked against them.
According to data from business school INSEAD, less than 3% of venture capital funds went to startups led by women in 2020, while women entrepreneurs are 63% less likely to receive venture capital funding than men.
Deloitte’s Taylor said female founders also generally ask for less money from investors than their male counterparts, which could hurt their prospects in the space.
“There is a lot of research that shows that women tend to be much more honest and downplay what they believe is the potential for their innovation,” she said. “Men are notorious for selling big and investors are used to it.”
Economies will grow when women can give birth to taxpayers and not die in the process
Brittany Barreto
Founder and CEO of FemHealth Insights
For Brittany Barreto, founder of FemTech analytics platform FemHealth Insights, these numbers highlight how important it is for startups to provide investors with accurate data — so that if they can’t appeal to personal experience (because VCs are men), they can provide robust information.
“It was very important that we stick to the data part of it all, because if we’re just angry feminists, it hasn’t worked yet. So I said: let’s be scientists and let’s be entrepreneurs,” Barreto said.
And the FemTech sector is growing at a staggering rate. More than 60% of FemTech startups were founded in the five years before 2022, and according to research by FemHealth Insights, there has been a 1000% increase in the number of businesses in this space over the last 10 years.
This rate of growth—despite myriad obstacles—is encouraging for an industry struggling to gain traction.
“I’m incredibly optimistic about the future of women’s health,” Barreto said, emphasizing the huge potential benefit to the world.
“The economic potential of countries if they can enable women to feel better, to live longer, to live with greater mobility?” she said. “Women have money. Economies will grow if we make women healthy.”