- Femtech sector in 2010 Despite an estimated $1 trillion in revenue by 2027, the taboo nature of women’s health and gender inequality continues to hamper the industry.
- Investing $300 million in improving women’s health would generate about $13 billion for the global economy, according to the nonprofit Women’s Health Access Matters.
- “If there was some more homework done by some of these investors, they would understand why this is such a ripe area for growth and investment,” Karen Taylor, director of research at Deloitte’s Center for Health Solutions, told CNBC.
Despite being tipped to be worth $1 trillion by 2027, investors are ignoring a huge segment of technology because it’s considered “taboo.”
The FemTech sector includes all innovations designed to solve health problems experienced by women only. 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 that the target market for products focused on their health is very large. But 3.3 percent of digital health investment in the U.S. fell on women’s health between 2011 and 2020, according to digital consultancy RockHealth.
And fostering innovation in the women’s health space isn’t just for women.
A study by Women’s Health Access Matters, a non-profit organization focused on funding women’s health research, says that a $300 million investment in improving women’s health would generate about $13 billion for the global economy.
A study on women’s health access issues suggests that a $300 million investment in improving women’s health could yield about $13 billion.
De Agostini Picture Library De Agostini | Getty Images
“The opportunities and potential for investment in this area are huge,” Karen Taylor, director of research at Deloitte’s Center for Health Solutions, told CNBC.
“So if these investors had done some more homework, they would have understood why this area is ripe for growth and investment.
Tanya Boller founded the women’s health-focused tech company in 2013 after noticing a lack of products designed for new moms. LV’s main products are pelvic floor trainers and portable breast pumps.
But not everyone took her new job seriously.
“To be completely honest, the tech industry thought it was a joke,” Boller told CNBC.
“They really didn’t get it… [and] The problem with a few women’s health issues is that there is a lack of education, a lack of interest. It’s not clear what the text is from an investment perspective,” Boller said.
A personal understanding of a product is often key for investors, but statistics show that the majority of investment decisions are made by men. 2022 European Women in VC, a collection of top female venture capitalists, found that only 15% of VC’s total partners are women.
Despite the obstacles, Elvie has grown up. It is now one of the largest companies in the femtech space, with revenues of $100 million. There are examples of women who have run marathons and had surgeries using LV pumps, which CEO Tania Boller says shows the impact of investing in women’s health on humanity.
“We went with a very strong message of encouragement, but at the same time we face taboos, we don’t shy away from it. And that starts the conversation,” said Boller.
The issue of lack of understanding of women’s health – and the need for women-centered health solutions – is deep-rooted.
“It’s really hard to beat because it’s such a taboo subject,” said Valerie Evans, a consumer investor at venture capital fund The Craftery.
“Because it’s not [investors] I don’t want to know and it’s not because they’re being willfully ignorant, but I think it’s a general societal problem that permeates the investment world.
And while the number of female investors is limited, the gender balance within a company’s teams also affects how difficult it is to find support.
More than 70% of femtech companies have at least one female founder, compared to an average of 20%, according to McKinsey & Company.
But that means the odds are stacked against them.
In 2020, data from the Business School indicated that venture capitalists fund less than 3% of startups led by women, while female entrepreneurs receive 63% less VC backing than men.
Deloitte Taylor’s female founders generally ask investors for less money than their male counterparts, which could hurt their prospects in the space.
“There’s a lot of research that shows that women tend to be more honest and play up what they believe is their creative potential,” she says. “Men are known for big sales and investors are used.”
When women can give birth to taxpayers and not die in the process, the economy grows
Founder and CEO of FemHealth Insights
For Brittany Barreto, founder of FemTech Analytics Platform FemHealth Insights, these figures highlight the importance of startups taking real data to investors — so they can provide solid data if they can’t appeal to personal experience (because the VCs are men).
“It was very important that we follow all these data parts because if we are just angry feminists, that has not worked yet. So I was like: let’s be scientists and let’s be business people,” Barreto said.
And the FemTech sector is growing at an amazing pace. More than 60% of femtech startups will be founded in the five years to 2022, and the number of businesses in the space has increased 1,000% over the past 10 years, according to FemHealth Insights research.
These levels of growth – despite myriad obstacles – are encouraging for an industry that has been struggling to gain traction.
“I’m incredibly optimistic about the future of women’s health,” Barreto said, noting its huge benefits to the world.
“What if the economic power of countries could make women feel better, live longer, be more mobile?” She said. “Women have money. If we keep women healthy, the economy will grow.”