Investors are ignoring a huge subsection of tech because it’s considered “taboo” – despite the fact that it is set to be worth $1 trillion by 2027.
The FemTech sector includes all innovations designed to solve health issues suffered solely, differently, or disproportionately by women. It covers everything from health during pregnancy and menopause, to Alzheimer’s and HIV.
Women make up more than 50% of the global population, which means the target market for products focusing on their health is massive. But just 3.3% of digital health investment in the U.S. went towards women’s health between 2011 and 2020, according to digital consultancy Rock Health.
And nurturing innovation within the female health space doesn’t just benefit women.
Research by Women’s Health Access Matters, a nonprofit organization focused on funding for women’s health research, suggests that a $300 million investment into improving female health could generate around $13 billion for the global economy.
“The opportunities and the potential for value creation of investing in this area is huge,” Karen Taylor, research director of the Centre for Health Solutions at Deloitte told CNBC.
“So I think if there was some more homework done by some of these investors, they’d understand why this is an area that is ripe for growth and investment.
Tania Boler created Elvie, a tech company focused on women’s health, in 2013 after she found a lack of products designed for new mothers. Elvie’s main products are pelvic floor trainers and portable breast pumps.
But not everybody took her new business seriously.
“To be completely honest, the tech industry thought it was a joke,” Boler told CNBC.
“They just didn’t really get it … [and] in quite a few women’s health issues, the problem is that because there’s a lack of education, there’s a lack of demand. From an investment point of view it’s not clear what the thesis is,” Boler said. The company’s revenue now exceeds $100 million.
Personal understanding of a product is often key for investors, but the stats show that most investment decisions are made by men. A 2022 report by European Women in VC, a collection of senior female venture capitalists, found that just 15% of VC general partners were female.
A similar story has played out for several of 2023 Disruptor 50 companies focused on femtech, like virtual women and family clinic Maven and fertility care company Kindbody, which ranked No. 21 and No. 43 on this year’s list, respectively.
Kate Ryder, CEO and founder of Maven, told CNBC reporter Leslie Picker at the CNBC Work Summit last fall that “Women’s health and family health has always been underserved.”
Like many start-up founders, Ryder’s determination to create Maven came partially as a result of personal experience, in her case medical frustration and trauma. A miscarriage left her feeling “lost, discouraged, and confused why something so painful and physically taxing was considered outside the bounds of traditional healthcare,” she wrote in a post on the company’s website.
Launched in 2014, Maven became the first female-focused health start-up valued at over $1 billion in August 2021.
Kindbody founder Gina Bartasi was frustrated by the lack of transparency and clarity when going through fertility treatment. She went on to found two fertility startups. The first was FertilityAuthority, a content platform that was acquired by Kleiner Perkins and TPG; then Progyny, a fertility benefits platform for employers that made the CNBC Disruptor list before it went public in 2019.
One of Kindbody’s newer locations is in the Bentonville area of Arkansas, near the Walmart headquarters. The company says that growth at that clinic has been the fastest of any of its other clinics — a sign of unmet demand.
“We see this pent up demand in historically underserved areas — what we call fertility deserts,” Bartasi told CNBC in March.
Reporting by CNBC’s Hannah Ward-Glenton
