FemTech — Revolutionizing the healthcare industry
FemTech is a term that is not familiar to everyone. It was first established by Ida Tin, who founded Clue, a period and ovulation tracking app, in 2013. The term is now used to encompass a category of products, services, and software that focus on women’s health using innovative technologies.
What is FemTech?
The FemTech industry is very versatile and disruptive in many healthcare areas, taking the needs of women into account. Many important areas such as menopause, the menstrual cycle, maternal health, and pelvic and sexual health are now starting to get the attention they deserve. In many cases, FemTech companies are thereby filling gaps that are not addressed by the pharma industry.
There are multiple promising startups in the FemTech industry. One of them is Progyny an American based startup founded in 2016. Progyny manages fertility benefits for employees thereby supporting employees in their family planning. In 2019 Progyny went public with a valuation exceeding $1 billion.
Experiencing growing valuation, the FemTech space gets more attractive. Nevertheless, there are still unexplored areas leaving room for new start-ups and expansions as demonstrated by the analysis of McKinsey (2022).
When it comes to FemTech founders, women are more represented than in most other industries. Recent analyses showed that 70% of FemTech startups had at least one female founder compared to less than 20% for new start-ups in general. This opens the male-dominated tech industry to new opportunities for women.
The FemTech industry has enormous potential. In America alone, women spend an estimated $500 billion a year on medical expenses, according to PitchBook. Despite this market potential, investment in the FemTech area is still lacking. Even though, investments are rising, reaching a new peak of $2.5 billion in 2021 one could say that the industry is still underinvested. As an example, in 2019, the whole FemTech industry raised $592 million whereby Uber alone raised $8.1 billion in its IPO in the same year.
Underinvestment in FemTech startups is a complex issue. It is not only due to unconscious gender bias in the investment scene but also to cultural taboos and stigmatized views regarding the female body. Many FemTech founders still face ignorance about how the female body works which makes their pitches harder. This is partly due to the fact that only 3.2% of partners in VC firms are female.
Concluding the FemTech industry has enormous potential, and we (men + women) can stay excited for what is to come.
This newsletter is fully independently produced by the members of the Nova Venture Capital and Private Equity Club. This club is run by students of the Nova School of Business and Economics.
The sources used for this article:
Knickerbocker, K., 2022. What is femtech?. [online] Pitchbook.com. Available at: <https://pitchbook.com/blog/what-is-femtech> [Accessed 13 April 2022].
McKinsey, 2022. The dawn of the FemTech revolution. [online] Available at: <https://www.mckinsey.com/industries/healthcare-systems-and-services/our-insights/the-dawn-of-the-femtech-revolution> [Accessed 13 April 2022].
Nayeri, F., 2021. Is ‘Femtech’ the Next Big Thing in Health Care?. [online] Nytimes.com. Available at: <https://www.nytimes.com/2021/04/07/health/femtech-women-health-care.html> [Accessed 14 April 2022].
Next Mannheim, 2022. Was genau ist FemTech? — NEXT MANNHEIM. [online] NEXT MANNHEIM. Available at: <https://next-mannheim.de/was-genau-ist-femtech/> [Accessed 15 April 2022].
