Part of the technology is said to be worth $1 trillion. But taboos hold it back
Investors are ignoring a large subset of technology because it’s considered “taboo” — even though it’s expected to be worth $1 trillion by 2027.
The FemTech sector encompasses all innovations aimed at solving health problems that affect women exclusively, differently or disproportionately. It covers everything from health during pregnancy and menopause to Alzheimer’s and HIV.
Women make up more than 50% of the world’s population, which means the target market for products focused on their health is huge. However, between 2011 and 2020, only 3.3% of digital health investments in the US went to women’s health, according to digital consulting firm Rock Health.
And fostering innovation in women’s health doesn’t just benefit women.
Research from Women’s Health Access Matters, a nonprofit focused on funding women’s health research, suggests that investing $300 million in improving women’s health could generate around $13 billion for the global economy .
Research from Women’s Health Access Matters suggests that investing $300 million in improving women’s health could generate approximately $13 billion.
De Agostini Picture Library | De Agostini | Getty Images
“The opportunity and value creation potential of investing in this space is tremendous,” Karen Taylor, research director of Deloitte’s Center for Health Solutions, told CNBC.
“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 founded Elvie, a tech company focused on women’s health, in 2013 after realizing a shortage of products for new moms. Elvie’s main products are pelvic floor trainers and portable breast pumps.
But not everyone took their new business seriously.
“To be perfectly honest, the tech industry thought it was a joke,” Boler told CNBC.
“They just didn’t really get it… [and] The problem with many women’s health problems is that there is a lack of demand due to a lack of education. “From an investment perspective, the thesis is not clear,” said Boler.
Personal understanding of a product is often crucial for investors, but statistics show that most investment decisions are made by men. A 2022 report by European Women in VC, a group of experienced venture capitalists, found that only 15% of VC general partners were women.
Despite the obstacles, Elvie has made great strides. It’s now one of the largest companies in the FemTech space, with $100 million in revenue. There are examples of women running marathons and undergoing surgery while expressing milk with Elvie pumps, which CEO Tania Boler says underscores the human impact of investing in women’s health.
“We have conveyed a very strong message of empowerment, but at the same time we are tackling the taboos head-on and not shying away from them. And that gets the conversation going,” Boler said.
The problem of not understanding women’s health – and the importance of women-specific health solutions – runs deeper.
“Because it’s been such a taboo subject, it’s really hard to break out of,” said Valerie Evans, consumer investor at venture capital fund The Craftory.
“Not because [investors] I don’t want to know, and not because they’re willfully ignorant, but I think it’s a societal issue that’s kind of permeating the investing world.”
And while the number of female investors is limited, the gender balance within company teams can also affect how difficult it is to get support.
“Being angry feminists didn’t work”
According to McKinsey & Company, more than 70% of femtech companies have at least one female founder, compared to the average of 20%.
But that means the odds are against them.
According to data from business school INSEAD, less than 3% of venture capital funds went to women-led startups in 2020, while women entrepreneurs are 63% less likely than men to receive VC funding.
Deloitte’s Taylor said female founders are also generally asking less money from investors than their male counterparts, which could hurt their prospects in the industry.
“There’s a lot of research that shows women tend to be a lot more honest and downplay what they think has potential for innovation,” she said. “Men are known for big sales and investors are used to it.”
Economies will grow if women can give birth to taxpayers and not die in the process
Founder and CEO of FemHealth Insights
For Brittany Barreto, founder of femtech analytics platform FemHealth Insights, these numbers underscore the importance of startups providing investors with accurate data. So if they don’t have personal experience to draw from (because the VCs are men), they can provide reliable information.
“It was very important that we stick to the data aspect of all of this because if we’re just angry feminists, it hasn’t worked yet. So I thought, let’s be scientists and business people,” Barreto said.
And the femtech sector is growing amazingly fast. More than 60% of FemTech startups will be formed in the five years to 2022, and according to a study by FemHealth Insights, the number of companies in this space has grown by 1,000% in the last 10 years.
These growth rates — despite a myriad of obstacles — are encouraging for an industry that’s struggling to gain traction.
“I’m incredibly optimistic about the future of women’s health,” Barreto said, emphasizing the tremendous potential benefits to the world.
“The economic potential for countries if they can enable women to feel better, live longer and live with more mobility?” she said. “Women have money. The economy will grow if we make women healthy.”