With the recent IPO of Progyny and the S-1 filing of She Beverage, the femtech industry has gradually come to public attention. Femtech refers to technology that is specially geared towards the need of women. As a subcategory of health technology, this vertical attempts to highlight the exclusion of women’s health needs in the traditional healthcare industry, while creating solutions for a range of those needs including menstrual cycle tracking, pregnancy and fertility.
Segmenting the Femtech Landscape
The femtech vertical can be further broken down into four subsegments: general health & wellness, healthcare & diagnostics, reproductive health, and pregnancy & family care. Per analysis of 51 US Femtech companies in the Rock Health Digital Health Funding Database, the majority of funding in femtech is directed to pregnancy and fertility.
In total, $688.8M has been invested in digital health companies targeting fertility and pregnancy through H1 2020. This represents 65% of all Femtech funding, and includes six of the top 10 funded Femtech companies. Comparatively, less than 45% of the US female population is of reproductive age, and only a portion of this subset is actively trying to get pregnant, is pregnant, or is post-pregnancy. Additionally, only 10% of women in the US between the ages of 15-44 struggle with getting or staying pregnant. That leaves a majority of women deprioritized in the current scope of digital health solutions.
Opportunities in the Femtech Market
While we still view femtech as a niche industry, we believe secular drivers could help propel new growth opportunities in the space. Those include the increasing representation of women in the venture-backed technology community, rising and awareness of women’s health issues, and the universal growth of the personalized medicine industry.
Key industry growth drivers:
Large market opportunity: Working-age women spend 29% more per capita on healthcare compared to men and are 75% more likely to use digital tools for healthcare than men. Also, while women contribute an estimated $500 billion medical expense, only 4% of total healthcare R&D is targeted towards female health issues
Conducive regulatory environment: Since 2016, regulatory agencies have supported modern digital applications for the treatment of conventional women’s health issues. CE approved Natural Cycles, a hormone-free birth control application, to be marketable in Europe in 2017, and the FDA approved Ava, a fertility tracking wearable, in 2016
VC funding on the rise: Personalized wellness and consumer healthcare technology, a key area within femtech, has been a top-five investment area in digital health for several years. Furthermore, VC funding in femtech has been steadily increasing since 2011
Rise in preventive medicine and holistic health: Numerous femtech startups are focused on increasing general wellness through providing preventative health solutions, such as fitness and mental health applications and devices. In addition, holistic health aims to draw connections between physical, mental, and emotional health
Health IT advancements: Advancements in health technology (for example, AI and cloud-based informatics), have made personalized solutions more accessible and affordable. The rise of digital tools has helped users understand and manage their health data and has driven targeted solutions that allow consumers to create more personal health experiences
Growth Beyond Fertility
While the majority of femtech products focus on fertility and pregnancy, we believe new approaches to women’s health will help open the door to new products and services. Below are some growth areas to look at.
Endometriosis: Endometriosis is a disorder in which tissue that normally lines the uterus grows outside the uterus. The disease has affected every one in 10 women, equivalent to the prevalence of diabetes. However, only around $1 of research funding is invested in endometriosis for every $200 invested in diabetes. In the next five years, the global market for endometriosis is expected to reach $2.3 billion, presenting a huge growth opportunity for products and services focused on the disorder
Personalized, female-oriented approach to general health & disease management: As the personalized medicine industry gains popularity, we expect to see more personalized and female-oriented approaches to general health & disease management, with a focus on heart health, pain management, and diabetes & weight management
Menopause: Menopause offers a potentially lucrative yet underdeveloped opportunity, especially with the steadily rising purchasing power of women approaching the age of menopause. Founders have historically sidestepped menopause as it is affected by a complex mix of factors including hormones, and mental, metabolic, and heart health, among others. As these areas begin to be individually and collectively researched in relation to menopause, startups will be more likely to develop related products
1. “Femtech is expansive—it’s time to start treating it as such,” RockHealth, Sandhu Nimerta, August 3, 2020.
2. “Femtech Expected to Break New Grounds,” Pitchbook, August 26, 2020.