First-wave feminism is nearly 150 years old. The women’s liberation movement has been alive and well in most industrialised countries since the 1960s. We can even optimistically conclude that the world is on a path to gender equality. We do, after all, make up roughly half of the global population. Why is it then that we so are drastically underrepresented in healthcare research and clinical trials? Beyond breast cancer, women’s health issues only account for 1% of research in the pharmaceutical sector. And that’s despite the fact that women of childbearing age incur health expenses that are roughly 80% higher than their male counterparts.
So the fight continues. And as our voice grows stronger, companies find themselves under growing pressure to develop solutions that are more geared towards meeting women’s needs.
Holly West is one of Investment Quorum’s budding young investment analysts. Passionate about helping people and enabling them to meet their aims in life, she has been researching FemTech in all its guises. This week, she tells us why FemTech is a gap in the market and should be taken seriously by investors.
“FemTech” was coined in 2016 by Danish entrepreneur Ida Tin, who founded Clue – one of the first period- and fertility-tracking apps. Half a decade later, it is used to refer to a myriad of solutions developed by the likes of DotLab (which has developed a type of blood test that aids in the diagnosis of active endometriosis), Sera Prognostics (a global leader in women’s health diagnostics for preventing premature birth) and Kasha (set up to ensure that women in emerging markets get the products, information and services they need for their health, self-care and well-being). Together, these fast-growing businesses are catalysing the emergence of a massive sub-sector in tech. And what many investors are finally realising is that these female-centric products and services have been neglected for too long.
Did you know that modern car seats are too firm to protect women against whiplash injuries? And that seatbelt design is such that women are 73% more likely to be injured in a front-end crash than men? In short, the automotive sector has never considered it worthwhile conducting tests using a female crash test dummy. Then there is the pharmaceutical sector: we are told that a low dose of aspirin every day helps to prevent heart attacks and stroke. But it wasn’t until recently that clinical trials started focusing on women specifically. And the results show that aspirin might do more harm than good in younger women.
In many ways, FemTech does represent emerging awareness of the need to give legitimacy to the health tech market for women. Indeed, numerous investment management firms see it as an exciting new space, and their backing is driving innovation, attracting investment and helping to demystify discussion and normalise debate about women’s health. When Ida Tin first used the term, its primary focus was on menstruation and fertility. But innovation and numerous partnerships with other start-ups since then have pushed the industry into several new areas – everything from fitness to sex tech.
Estimates for the current worth of the FemTech market vary – everything from US$500 million to US$1 billion. And the market is expected to grow at a rate of 16.2% between 2001 and 2027. According to some forecasts, it is expected to exceed US$60 billion by 2032.
The entire history of humanity can be seen as a series of pendulum swings, backlashes and counter-backlashes… all underpinned by fundamental progress. Needless to say, feminism has played a major role.
The overturning of Roe v. Wade has shown that half a century of progress can be undone in just one ruling. The decision has prompted numerous other jurisdictions to take action to protect abortion rights in the US. But interestingly it has also catalysed the emergence of numerous period-tracker apps boasting enterprise-level encryption: people are afraid that the US legal system will subpoena data from period trackers so they can be prosecuted for having illegal abortions.
One such app – Stardust – made its way to the top of Apple’s app store because of its strict privacy policies, which include an encrypted wall between users and their personally identifiable information.
Historically, FemTech has been beset by numerous barriers. A couple of years ago, a minuscule 2.3% of venture capital funding found its way into women-led start-ups. And since 90% of investment decision-makers are male, they had to grapple with the additional problem of topics such as menstruation, endometriosis and menopause care not being readily understood by the men to whom they were pitching.
Many of the misunderstandings stem from the fact that it is such a new sector. And that could explain why investor support has been slow to emerge. That is, until now. Suddenly, it is proving a very popular space for new investors.
Furthermore, a number of sub-sectors are attracting a great deal of interest (fertility, menopause…), but products designed to address topics that are still seen as taboo in several countries (such as sexual health) are still struggling to attract investors. It could also be that the lack of funding and FemTech could still be partly attributable to gender differences.
Although raising money is doubtless slightly more challenging for the founders of FemTech companies, the number of investors exclusively dedicated to women-led businesses is on the rise.
There are high hopes for FemTech’s future. Since this is such an exciting (and still such a relatively new space), Investment Quorum is keeping a very close eye on the various other funds emerging that are purely focused on FemTech – and many more are planned. And even at this early stage, there have been some high-impact success stories. Last year, revolutionary global health and lifestyle brand Elvie founded by Tania Boler completed a £58 million investment. UK tech start-up Hertility Health, meanwhile, pulled in £4.2 million to help it revolutionise the world of hormone and reproductive health.
Women tend to be far more willing to assume responsibility for their health than men. Accordingly, they are 75% more likely to use digital healthcare tools. According to Investment Quorum’s Head of Marketing Faye Brindley, “FemTech also brings with it so many thrilling challenges. It is fresh, exciting… and in a world increasingly about female empowerment”.
Investing in FemTech also has a social impact. At Investment Quorum, we are constantly looking for opportunities to make a social impact, raising awareness internally for the sake of the women who work at our company, as well as providing our clients with ESG opportunities.
Numerous companies have already developed apps that monitor menstrual cycles and track reproductive health. But there is still room for more players to focus on issues that are still considered taboo in some cultures (menopause, sexual health…).
According to the United Nations, in 2020 985 million women were aged 50 and over. By 2050, that figure is expected to have risen to 1.65 billion. And by 2030, the world population of menopausal and postmenopausal women is projected to increase to 1.2 billion. That represents a huge opportunity for innovation.
The FemTech tag may not be around for much longer. Ultimately, the products and services that it currently covers will shake off that label and will take their rightful place alongside other consumer-focused lifestyle and well-being solutions. There is still much work to do in terms of closing the gender gap when it comes to access to well-being resources, knowledge and medical care, but as scientific innovation focused on women’s health picks up pace, so will investment opportunities in FemTech. The promise and potential of FemTech are huge. This space is still in its infancy, but there is real motivation to innovate where options have thus far been limited. Hopefully, as investment starts to flow, thoughtful solutions will emerge that are truly useful and empower us to fulfil our potential.