My dear Friends,

Plenty of headlines claim FemTech is on its way to becoming another new boom industry.

But maybe it is just a new hype – like Theranos. The ill-fated company were its recently convicted con artist Elisabeth Holmes tricked $9 billion from investors by hyping a healthcare device that never actually existed. Or, like FTX, it was the media with plenty of headlines that were the cause of the hype. The now-bankrupt crypto exchange owes around $ 3 billion to debtors; how much money was lost by clients using the crypto exchange is unclear.

However, considering that 49,7 % of the world’s population is women, this “new” industry could be a new boom industry after all.

Maybe all this talk about FemTech being a new boom industry is yet another hype? Or is the industry after all worth investing in?

What is it, anyway?

The FemTech sector is primarily concerned with addressing the specific health issues a woman experiences during their lives. Innovations usually fall into one of the following categories:

FemTech refers to software, diagnostics, products, and services that use technology to support women’s health. Ida Tin, the founder of Clue, a period-tracking app, invented the term.

For Ida Tin, it was a way “to legitimise the female health tech market”. Her goal was to drive innovation, attract investment, and help to normalise conversations about female health.

A McKinsey study states that funding in FemTech startups has risen from next to nothing in 2008 to almost $2.5 billion in 2021. Moreover, deals have seen the same trend, from a handful to almost 300 over the same period.

“I went on to coin the term ‘FemTech’ as a way of helping to legitimise the female health tech market, thus driving forward innovation, attracting investment, and helping to normalise conversations about female health.”

Ida Tin, Founder and CEO of Clue

A case of underrepresentation

Despite the fact that women spend $500 billion on medical costs each year, just 4% of research and development funding was allocated to problems that directly affect women.

The Gender Data Gap in healthcare is well documented. 70% of people impacted by chronic pain are women, yet 80% of pain studies are conducted on male mice or human men.

Firstly, most healthcare products or tools, for that matter, are based with a 70 kg white man in mind.

Secondly, women are underrepresented in clinical trials as well. As a result, their specific issues have been disregarded in medical device development. For this reason, women are 20-30% more likely to be misdiagnosed.

For example, the pain in the left arm and a painful squeezing sensation in the chest, a sure signs of a heart attack. Right?

On the contrary, for women, heart attack indicators are more similar to heartburn. That may be one reason why women are 50 per cent more likely than men to be misdiagnosed following a heart attack. Consequently, women are therefore more likely to die from one.

Hip implants are another example. They were designed with men’s musculature in mind and had much higher failure rates for women.

When women report pain, they are less likely to be treated for it, with their symptoms too often dismissed as “emotional” or “psychosomatic.”

Furthermore, women metabolize some drugs more slowly. Recommended dosages or the effect of components are affected as a consequence. This has been recognized only very recently. Consequently, women experience adverse reactions from drugs twice as often as men. Other than certain women-specific cancer, female conditions comprise less than two per cent of the healthcare research and innovation pipeline.

“WE NEED A LOT MORE SUPPORT FROM PEOPLE WHO UNDERSTAND THE NEED AND VALUE PROPOSITION OF FEMTECH COMPANIES AT THE EARLY STAGES”

Sophie Smith, CEO and Founder of NABT Health

Boom- industry or movement

There can be no doubt the industry is mission-driven. The aim is to make medicine more inclusive, to meet patients where they are, and to connect with them in the best ways possible.

FemTech-preneurs have set out to improve women’s health. Why? Because the healthcare system women entrust with taking care of them seems to lack the tools they truly need to care for their specific needs. So, some women with a vision set out to fill the gender health gap.

The industry‘s ultimate goal is to develop the tools to monitor women`s health more effectively and collect vital data that ultimately provides tailored solutions. It seems no market has ever been more ready!

#1 FemTech will transform how we collect healthcare data and how we use it.

#2 FemTech will revolutionize how patients communicate with doctors

#3 FemTech is redefining inter-patient communication.

The question now is, does being on a mission automatically entail having to forget about making a profit? Certainly not, and as can be seen, the FemTec industry is on an upward trajectory.

From its humble beginnings in 2015 with $600 million of VC funding, the industry has grown to a $30 Billion industry by the end of 2022. Further, the projected market potential is $50 Billion by 2025.

“The women’s health and sexual health space is massively underserved. And it’s only recently with a new demographic of venture capitalists that we’re seeing investments go toward other areas besides fertility.” 

Carli Sapir, Partner at Amboy Street Venture

Funding a movement

The biggest challenge is that most VC companies are male-dominated, if not all male. Consequently, there is a lack of adequate knowledge on female health issues, the femtech industry, and its overall impact.

Due to this lack of general R&D data, most of the VC funding went to companies specializing in infertility issues. Why? Only because the WHO identified infertility as a disease and a public health issue, plenty of data was released. Consequently, the number-hungry VC companies could be fed with the desired data, and infertility became a pretty safe investment.

However, the general problem with funding is that only 2.3 per cent of venture capital funding goes to women-led startups. This might be due to very different pitch styles. The venture capital world is used to the big vision, massive growth projections, and unicorn promises. Female founders tend to be more real, honest and conservative in their growth projections.

There is another snag, a lack of sizable exits. First and foremost, money managers must develop a general thesis about a market before investing. Because it is an emerging industry, there are still too many unknown factors.

To secure funding, most FemTech founders struggle to be entrepreneurs, advocates, and patients simultaneously. Many have their own troublesome medical history. Often, it was the sheer desperation and the long-suffering that led to the business concept. This is likely why investors quite wrongly label the industry as a movement rather than focussing on the business concept destined to make money.

Yet, FemTech founders walk this fine line, not by choice. If they talk too little about their own journey, investors consider them not “inspiring enough” and “not committed”. Too much about their own journey and are considered ” too emotional” and labelled with a lack of resilience to see the project through.

“If you look at investment dollars this year a lot more than ever has gone to Series A and seed stage. I think that’s a signal that this isn’t going away and that people are really diving [into] new, innovative technologies.”

Chis Moniz, Market Manager Silicon Valley Bank

Opportunity

With more awareness of the impact of Femtech products, investors, researchers, and business owners have a real opportunity to support this rising innovation trend and usher in a new era in women’s health.

End-User

There are 3.986.819.259 women on this earth, so it should be no surprise that FemTech actually presents an excellent investment opportunity for individuals.

The fact is women are underserved by products designed for their specific concerns. Billions of women worldwide have struggled with these issues for generations. Yet it’s only now, with more women working in the tech industry, that there are companies starting to look for sophisticated solutions for them. And what better way to have such products designed by the actual end-user?

Growth

More recently, some femtech companies are seeing triple-digit growth and funding rounds amounting to millions of dollars.

The market is expected to grow at a CAGR of 16.2 per cent from 2021 to 2027. FemTech Analytics reported the sector is expected to exceed $60 billion within the next decade.

This, of course, raises one question: why the sudden rise in interest?

FemTech leaders have clearly benefited from cultural shifts, resulting in a growing interest in diversity and inclusion.

The pandemic, however, seems to be the driving force here. It appears to have accelerated FemTech’s growth by exposing the challenges women face. At the same time, the popularity of online health tools grew exponentially. An additional aspect is plenty of cheap money looking for opportunities; there has never been a better time for FemTech to flourish.

However, will this trend last, especially with rising interest rates?

According to research, women are 75 per cent more likely to use digital healthcare tools than men. Further, the Female Founders Fund suggests that by 2023, 1.1 billion women will be postmenopausal. This is undoubtedly a massive opportunity for innovation.

FemTech comes with so many untapped female challenges and is, therefore, fresh, exciting, and the future.

So, FemTech is undoubtedly an industry with plenty of potentials to grow. If it will one day be, the new boom industry remains to be seen.

Speed Read

The FemTech sector is primarily concerned with addressing the specific health issues a woman experiences during their lives.

From its humble beginnings in 2015 with $600 million of VC funding, the industry has grown to a $30 Billion industry by the end of 2022. Further, the projected market potential is $50 Billion by 2025.

Female founders’ have a general problem with VC funding. Only 2.3 per cent of venture capital funding goes to women-led startups. The cause could be the very different pitch styles.

Overall, the market is expected to grow at a CAGR of 16.2 per cent from 2021 to 2027. FemTech Analytics reported the sector is expected to exceed $60 billion within the next decade.

The FemTech industry definitely has plenty of potentials to grow. If it will one day be, the new boom industry remains to be seen.