In the realm of healthcare, a startling disparity exists, women are 50% more likely to receive a misdiagnosis following a heart attack, with a consequently higher risk of mortality compared to men. This disparity stems from initial heart disease studies, which focused mainly on men, making “typical” symptoms like chest pain the norm and overlooking the different symptoms women often experience. It is one glaring example of the long-standing underrepresentation and neglect of women in medical research and trials, but the problem runs far and wide.
In 2020, just 1% of healthcare R&D funds went to female-specific health issues, excluding cancers at 4%. Between 2011 and 2021, only 4% of Medtech novel approvals related to female-specific health conditions.[1] Overall, the long-term bias toward the male anatomy has had far-reaching consequences, with women diagnosed, on average, four years later than men across more than 770 diseases.[2]
Enter FemTech, an emerging sector now valued at $28 billion, up from $500 million[3] a decade ago. Despite this rapid growth, investments represent a mere 1 to 2% of total Health tech funding, a stark contrast given that women comprise half of the global population.
Investors’ lack of understanding
The prevailing male-dominated investor landscape tends to overlook the significant potential of FemTech, mainly due to a prevalent comfort bias. Investors naturally gravitate towards funding entrepreneurs who reflect their image, background, and experiences, from attending the same universities to sharing similar lifestyles. This inclination influences investment choices. At the same time, with women comprising 12% of decision-makers at VC firms, there is also a shortage of female investors who grasp FemTech’s value or need for disruption.
These biases are magnified by the incorrect perception that targeting female consumers represents a ‘niche’ market. This perspective significantly undervalues the reality that women make up half the population and influence more than 80% of consumer healthcare choices. Moreover, many health concerns tackled by FemTech, like fertility, are not only women’s issues but are also relevant to men, underscoring the broader significance of these technologies.
These issues result in the investment world remaining largely oblivious to what FemTech represents, undervaluing the sector’s potential. This oversight does not just hurt women; it means a missed opportunity for investors to be part of a transformative force in healthcare.
What is Femtech exactly?
FemTech extends far beyond fertility, periods, and pregnancies. It encompasses a diverse ecosystem of companies, each focusing on different aspects of women’s health, from fertility solutions that empower women with reproductive health and family planning tools to technologies supporting pregnancy and motherhood. It doesn’t stop there; sexual and gynaecological health services ensure comprehensive care, addressing everything from routine check-ups to sexual and gynaecological health and menopause management.
Moreover, FemTech is breaking new ground in chronic disease management by tailoring solutions to chronic conditions requiring ongoing care which are not exclusive to women but affect women differently (eg. cardiovascular diseases, cancer), affect women disproportionately (eg. autoimmune diseases, osteoporosis), or have proven gender bias in care delivery (eg. pain, mental health)
Since 2019, FemTech companies in the general health & wellness and fertility space have led in attracting venture capital, raising $2.1 billion and $1.5 billion, respectively. The general health & wellness sector, valued at $1.5 trillion and growing annually by 5-10%, has particularly thrived due to a shift towards holistic health, with companies like Careof emerging as leaders.[4]
Fertility companies are also drawing significant investment and consumer interest, highlighted by large funding rounds for companies like Maven Clinic and widespread adoption of B2C solutions like period-tracking apps. This focus reflects changing societal trends, such as later parenting and rising infertility issues, which have halved global fertility rates over the past 70 years.[5] Consequently, there’s an increasing demand for reproductive health management options, including data-assisted IVF and surrogacy, as women seek to better understand and control their fertility.
Emerging trends to watch
Changes in Direct-to-Consumer (D2C) ecosystem
The FemTech sector has been historically dominated by direct-to-consumer (D2C) business models, with 70% of companies leveraging it as their primary go-to-market strategy. This was driven by original founders of the vertical wanting to offer directly to women the knowledge and tools to empower them around their health. However, it has led to a crowded market, particularly in verticals like fertility and general wellness, making it difficult for companies to scale and monetise their user base, and raising concerns for investors about the exit potential of the overall sector.[6]
B2C FemTech firms will need to carve out a clear path to monetisation to stand out, and strategic partnerships are a viable solution, providing scalability and consistent revenue streams. Notable examples, such as Clue’s partnership with Oura[7] and Natural Cycles’ collaboration with Samsung[8], underscore the value of such partnerships, helping broaden the market reach and bolster the credibility of the companies involved showcasing the integration potential of the solutions.
Additionally, whilst having to navigate the critical nature of information, companies will have to articulate a clear strategy to leverage the accumulated user data they hold, the latter being very valuable to adjacent verticals. As it happens, one sector that is quite interested in hormonal health and its effect on woman, is the Beauty industry. As a reminder, in 2021, L’Oreal partnered with Clue to gain a deeper understanding of the relationship between skin issues and menstrual cycle, as the company was looking to anchor the boom it was observing in skincare. We expect an increased interest from Beauty and Pharmaceuticals company in FemTech companies providing data regarding women’s bodies and/ or allowing them to market their product to the right target audience for their products.
Funding and resources shifting to B2B providers
We anticipate a shift in funding and resources towards B2B providers in the coming years. These solutions are embedded in the healthcare ecosystem through insurers, hospitals, governing bodies, and corporations. They typically benefit from greater client loyalty and reduced customer acquisition and retention challenges compared to their B2C counterparts.
Progyny, a NASDAQ-listed company specialising in employer fertility benefits, is a stand-out player in this space, exemplifying the potential of B2B models in FemTech. The company went public in 2019 with an initial valuation exceeding $1 billion and now boasts a market capitalisation of around $3.6 billion.[9] Progyny is now actively evaluating potential fertility and women’s health acquisitions.[10]
UK-based Peppy, is also working directly with over 250 corporates to help them support their employees adequately across underserved areas of healthcare journey such as menopause, fertility, and pregnancy. The company uses its app to provide consultations, courses, at home testing, amongst others, to over 1 million employees and boast blue-chip clients such as Coty, Aviva, BNP Paribas and Novartis.
Untapped sub-verticals with interest from biotech and medical device companies will attract more investors
There is a clear push for increased R&D-driven solutions at the crossroads of Biotech and FemTech and within the medical device sector, as they have significant market and revenue potential. This includes prioritising fields like pelvic health and menopause management, which were historically neglected due to societal stigma.
Menopause, for example, affects women for a substantial portion of their lives, presenting a multitude of symptoms, from hot flushes to sleep disturbances. With approximately 1.2 billion women expected to be navigating menopause by 2030, the demand for solutions is increasing. The global menopause market, valued at $16.9 billion in 2023, is projected to soar to $24.4 billion by 2030, driven by the profound impact it has on health costs and productivity.[11]
A recent study suggests that untreated hot flushes alone result in almost $1,400 in health costs and $770 in productivity losses per person per year, with the global economic impact estimated at $150 billion per year.[12] Employers and insurers will be increasingly eager to adopt a solution to mitigate these figures. A Mercer health and benefits strategy report released earlier this year found that 15% of employers intend to offer menopause care benefits in 2024, up from 4% in 2023.[13]
Within the medical device space, Embr Labs who’s pioneering solution Embr Wave, a wearable device offering personalised relief for hot flushes that blends seamlessly into everyday life, has raised $50 million and is well-positioned to disrupt menopause care.[14] Another standout is UK-based femocentric device and technology company Elvie, which has developed a pioneering intelligent pelvic floor exerciser device that offers users real-time visualisation of pelvic floor movements through biofeedback, identifying incorrect contractions and providing guidance throughout each exercise. The company also provides breastfeeding and pumping devices to cater to mothers, serving an area which has for long been void of innovation. As of today, Elvie has secured over $120 million* in funding and is now focused on expanding into new markets and broadening its range of products.
These various R&D-driven solutions offer a clear path to exit. As they garner interest from larger pharma and medical companies, they cement FemTech as a viable investment opportunity for investors regardless of their targeted gender.
AI solutions are set for growth and increased investor attention
So far, AI’s most notable application in FemTech has been predictive algorithms, particularly within the period tracking industry. Apps like Flo utilise user data, such as menstruation dates, energy levels, and body temperature, to forecast cycle phases and potential physical and behavioural changes, including ovulation and mood shifts.
However, we expect additional funding to flow to AI technologies improving diagnostics, as female-related illnesses remain widely untargeted and underserved by traditional research. Endometriosis, for example, is a condition characterised by the growth of endometrial tissue outside the uterus, resulting in intense pelvic pain and potential infertility. Endometriosis impacts 1 out of every 10 women in their reproductive years, amounting to roughly 190 million women worldwide. Recent studies have shown that blood-based microRNA markers can be employed to develop an AI-powered diagnostic algorithm with efficacy comparable to the current standard of invasive laparoscopic surgery.[15] Given the condition’s prevalence and the non-invasive nature of this potential new diagnostic tool, it is an area ripe for investor and strategic buyer interest.
AI innovations have also been instrumental in advancing the early detection of breast cancer. Zurich-based, b-rayZ, specialising in AI-powered medical imaging, has developed a technology that classifies breast tissue density with a remarkable 93% accuracy, evaluating image quality instantaneously to optimise the detection workflow. Notably, the company was recently awarded the CE mark[16], showcasing the effectiveness and reliability of their advancements. The success of companies like b-rayZ exemplifies the immense potential of AI in revolutionising healthcare diagnostics, making it an appealing sector for investors.
The FemTech opportunity is vast and untapped
As we have established, the scope of FemTech extends well beyond reproductive health, covering a vast and varied market ripe for innovation and value creation. Improving women’s well-being enhances individual lives but also yields widespread societal benefits. The World Economic Forum estimates that investing $300 million in women-centric research could unlock $13 billion in economic gains.[17]
Yet, the true promise and impact of the FemTech sector often go unrecognised. With a growing global awareness of women’s health issues and an increasing demand for personalised healthcare solutions, FemTech presents a significant market opportunity and is expected to be worth over $1tr by 2027[18].
Investors should be increasingly drawn to the sector’s potential for disruption, as technology continues to empower women to take charge of their health in ways that were previously inaccessible. The intersection of technology and women’s health not only opens up vast untapped markets, but also contributes to breaking down stigmas surrounding women’s health, making FemTech a socially impactful and financially promising investment.
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