Femtech by the Numbers: The Rise of Innovation in Women's Health Technology
Leading up to our 2019 HITLAB World Cup: Women’s Health Tech Challenge, we partnered with HTD, a digital health services and advisory group, to take a deeper look at an industry poised to reach $50 billion by 2025. Read on for our findings.
All eyes are on femtech. Women’s health technology has taken the startup world by storm in recent years, introducing cutting edge health technologies and garnering over $241 million in venture capital funding so far in 2019. What was seen just a decade ago as a “niche” category is projected to grow to a whopping $50 billion by 2025. So what changed? Although the growth numbers are staggering, the need for innovative healthcare solutions for women is anything but new. At roughly half the global population, women make up a market of 3.73 billion prospective customers worldwide.
Why women’s health?
Women have long been underserved by the healthcare industry.
About 65% of healthcare employees are women, but they make up only 33% of senior executives and 13% of CEOs. Male-dominated leadership has led to the overrepresentation of men in clinical trials, a lack of gender-specific medical guidelines, and a dearth of innovation in healthcare technologies specifically geared toward women.
According to Frost & Sullivan, 90% of women are the primary healthcare decision makers for their households and are also responsible for 80% of family healthcare spending. Women over age 19 also spend more per capita on healthcare than men.
Health tech startups have their eye on this very large prize. The new sector coined “femtech” by Clue CEO Ida Tin encompasses the software, diagnostics, products, and services that use technology to improve women’s health.
What isn’t femtech?
The femtech industry is comprised of over 200 startups worldwide, many of which are founded and led by women. Perhaps the best known categories of femtech are menstruation care, sexual health, fertility tracking and solutions, and pregnancy care. Big names in these areas are developing entirely new solutions such as the Flex Disc, Thinx absorbent period underwear, or the Glow fertility and ovulation tracker. While others focus on building tech platforms and subscription services to make existing products such as birth control and period products more easily accessible.
Despite the surge of high-visibility millennial brands, there are also companies working for women at all ages. Genneve is an online clinic dedicated to providing support for women entering menopause. Other companies like Madorra and MenoGeni are developing devices and pharmaceutical alternatives to help treat menopausal symptoms.
And of course developing healthcare solutions for women is about much more than just reproductive organs. Femtech startups are taking on a wide range of issues and conditions that disproportionately affect women including osteoporosis, breast cancer, autoimmune conditions, stroke, thyroid issues, chronic fatigue, anxiety, and depression.
How big can femtech get?
In 2019 alone, femtech companies have raised at least $241 million in venture capital funding. Projections put this year at a total of $1 billion in funding, far surpassing the 2018 record of $650 million.
Even just the month of April has shown big wins for femtech. Elvie, a health tech hardware startup creating products like an understated wearable breast pump and a pelvic floor trainer, raised $42 million in Series B funding led by IPGL. Cora, a DTC retailer of organic period products closed $7.5 million in Series A funding. And NextGen Jane raised $9 million in Series A funding for a smart tampon that it hopes to lab test after use to identify early signs of endometriosis.
The industry’s rapid growth is encouraging as it signifies not only an increased willingness to invest in women’s health technology, but also a societal shift in which topics like menstruation, fertility, menopause, and sexual wellness are no longer relegated to doctor’s offices and hushed discussions between friends. But as with any shift in cultural norms, we still have a long way to go.
According to the Kauffman Foundation, private tech companies with women at the helm achieve 35% higher ROI than those led by men, but in 2018 companies with all women founders received only 2.2% of VC funding. And the gender breakdown in the VC world itself may be to blame: Women make up only 9% of venture capitalists working with startups. Finally, only about 4% of funding for healthcare research and development is invested in women’s health globally.
It may be gradual, but the tide is turning. As startups pave the way for rapid innovation and demonstrate the need for continued investment in the women’s health space, healthcare giants are likely to follow suit.