In association with NJF Holdings
Nicole Junkermann, international entrepreneur and investor, and the founder of NJF Holdings looks at how the transformation of ‘femtech’ is changing women’s lives
Investment on research, product innovation and therapeutic solutions for health issues that exclusively or disproportionately impact women has been historically scarce. Only 4 per cent of global healthcare R&D funding has been allocated to women’s health, even though it represents an economic burden of $500 billion — and women are 51 per cent of the world’s population.
At the root of it, there is an educational gap about women’s health, as well as a pervasive lack of representation of women in top leadership roles. This lack of representation, and therefore decision-making power, spans across research institutions, venture capital firms and corporate C-suite and boardrooms, as well as in politics.
For the last decade, the number of women leaders and start-up founders, especially in tech, innovation and science, has been steadily growing. This development goes hand in hand with their growing buying power, collectively as well as individually, which has fuelled the rise of a new economic ecosystem that has been labelled as “niche” until recently, and whose main purpose is putting women’s health needs at the top of the global agenda: femtech.
A soon to be $50 billion Industry
The word ‘femtech’ was coined in 2015 by Ida Tin, CEO and founder of period tracking app Clue, to designate this rising category that originated at the intersection of three trends: the growth and consolidation of the tech industry, advances in the feminist and equal rights movement, and a shifting healthcare landscape, with individuals starting to behave more like healthcare consumers rather than patients. Innovation, science and technology meet women’s health needs.
This emerging technology field includes medical devices and wearables, digital platforms and telemedicine solutions, diagnostic tools, and tech-enabled products and services focusing on menstrual health, fertility, pregnancy and birth, postpartum and maternal health, parenting support, lactation, menopause, hormonal health, breast, ovarian and cervical cancer prevention, as well as sexual and reproductive health and pleasure.
Economic activity and awareness have been slowly but steadily growing over the past ten years. Across the globe, female founders have put their heads down to question and redesign everything from improving and tending to the physical, financial and emotional journey of women that seek fertility treatment, as well as democratising access to maternal care. From building software tools to help women track and understand their hormonal cycles, to analysing the relationship between family building and career, by creating software solutions aimed at making parenting and work-life management more seamless.
Another example of the problems specifically faced by women was addressed on a recent Ted Talk by leading neuroscientist Lisa Mosconi who explains how menopause affects the brain and how women are more likely than men to be diagnosed with an anxiety disorder or depression.
Last year marked an inflection point in the evolution of femtech. Frost and Sullivan estimated it to become a $50 billion category by 2025, and the world started to really listen.
Within the past 12 months, funding allocated to femtech start-ups finally reached $1 billion in total (cumulative since 2014). We also celebrated several early successes. Feminine hygiene start-ups This is L. and Sustain Products were acquired by P&G and Grove Collaborative, respectively. Last autumn, fertility benefits company Progyny had a successful IPO. Finally, in early 2020, maternal health telemedicine and benefits platform Maven hit a record when it announced its $45 million Series C, the largest round ever raised by a female founder in femtech, a round that boasted celebrity investors like Mindy Kaling and Reese Witherspoon, both big contributors and public advocates of the gender equality movement.
Just in the UK alone, Elvie, the UK-based femtech start-up behind the pelvic floor trainer and innovative wearable breast pump device raised $42 million in a Series B. Additionally, CVC Capital Partners completed the acquisition of more than 20 speciality women’s health assets from Teva Pharmaceutical Industries Ltd, a US $703 million deal that culminated in the establishment of global specialty pharmaceutical Theramex, a company solely committed to supporting the health needs of women. Headquartered in London, the company markets a broad range of innovative, branded and branded generic products across 50 countries around the world and enjoys a long heritage and strong recognition among patients, practitioners and current employees. The company´s women´s health portfolio focuses on contraception, fertility, menopause and osteoporosis and includes key brands such as Ovaleap®, Zoely®, Seasonique®, Actonel®, Estreva® and Lutenyl®.
In parallel, an entire ecosystem is growing around the economic activity generated by femtech start-ups and businesses. Start-up accelerator programs for femtech such as those run by Founders Factory in NYC and AXA in Europe, investment funds and angel groups dedicated to funding and growing the space, with Portfolia launching the very first fund exclusively focusing on femtech, and big CPG (consumer packaged goods) companies and pharma players are paying close attention to the space. For instance, Johnson & Johnson has been co-sponsoring innovation summits with a focus on women’s health, and P&G Ventures partnered with Vinetta project to source its next billion-dollar women’s brand from the community of entrepreneurs and has expressed a strong interest in menopause and the ‘ageing well’ segment.
What’s next in femtech?
As we entered 2020, investors, thought leaders and founders increasingly emphasised the untapped opportunity of growing the field beyond the female reproductive journey — and related health concerns — to that of a lens through which we look into health and the way in which disease manifests in and impacts women differently.
Symptoms of heart disease in women look different from those of men, and they are more likely to be misdiagnosed. Depression is more common in women (one in four) than in men (one in ten). Also, women are seven times more vulnerable to autoimmune diseases and are two to four times more likely to experience chronic fatigue.
These issues are more common than we generally assume, and there’s a market for educational resources to facilitate diagnosis, user-friendly symptom management solutions that enhance the quality of life, and holistic treatment options that address the individual as a functional system, versus the overarching modus operandi, which is to separate and isolate health problems. Additionally, there is a tremendous opportunity to develop tech solutions aimed at increasing treatment access in rural areas and developing countries.
The femtech movement is progressing into a more intersectional territory, where it seeks to understand how to make healthcare services and therapeutics more attuned to the specific needs of the female physiology.
Investing In a Fairer Healthcare System: Research, Education and Access
Women’s health has traditionally been considered a niche market despite the fact that women make up half the population and manage the majority of household income – and handle a good portion of the healthcare needs of their families. Some have explained this market inefficiency as the result of gender biases, with a predominantly male investment community struggling to understand the value proposition, or to fully empathise with the problems and their impact on women´s overall wellbeing, as well as to make a fair assessment of how much women would be willing to pay for solutions.
Education and awareness continue to be instrumental in femtech’s growth. Companies in the space point to a diverse set of challenges with fundraising, with educating investors around women’s healthcare and its market potential as one of the leading causes of deal cycle friction. This highlights the glaring gap in our education system in reference to women’s, sexual, and reproductive health.
While access to potentially highly lucrative deals typically stays within familiar circles, we can see a shift happening in the investment community composition and activity, driven in large part by female and diverse funders who early on identified the urgency and the value in the sector, and who are putting their money to work. The same women that drive demand for these products, those that seek a better, more personalised, yet effective and convenient healthcare experience, are increasingly willing to put money towards the future of women’s care.
The overall impact of the current pandemic on healthtech innovation and investments remains to be seen, but this ‘niche’ sector has earned the right to be on the way to becoming one of the most disruptive healthtech markets of the decade.