Software, wearables, products and services for women have huge potential to close gaps, but where is the funding?
Before writing this article, I emailed a dozen of my female friends and asked whether they knew the meaning of the word “FemTech”.
They were under instruction not to Google it. Many of their educated guesses veered towards the obvious – but incorrect – meaning, “women in tech roles”. Just a couple of responses were on the mark and identified FemTech as technology developed especially for women.
FemTech is not a much used term in the digital health space, but it should be. It originated from Danish female entrepreneur Ida Tin. She coined the phrase after co-founding Clue, a menstruation tracking app, in 2012.
FemTech is the term that emerged to cover anything in the tech world designed especially for women’s health, including software/apps, wearables, products, diagnostic tools and digital services.
These technologies can relate to fertility and reproductive system health, periods, sexual health, pregnancy and nursing care, or any other areas of health affecting women, trans men and nonbinary people with female biology.
Bridging gaps in female healthcare
There is a compelling case for the need for FemTech. On top of addressing specific physical health needs, FemTech could help address cultural and social factors that prevent women from accessing healthcare.
In many communities and cultures around the world, women’s health is still treated as an issue to be dealt with privately. In some countries women are excluded from social or religious events, or even their own house, when they are menstruating.
Socio-economic challenges are layered on top of this, such as women not being able to leave the house to seek medical care when they are caring for children, and the benefits of technology geared towards women’s health become very clear.
FemTech opens up opportunities for women to seek treatment or support in cases where they are either not comfortable talking about a health issue or are unable to access healthcare due to cultural restrictions and social norms. Given women are 75% likelier to adopt and use digital health tools than men, it makes sense to create more FemTech for women to support women’s health.
So, given the clear health needs that exist for women, why don’t we have more FemTech tools and products in development?
Overcoming the FemTech funding challenge
Funding can be a sticking point for FemTech. Venture capital is a critical source of funding for new technologies and a major deciding factor for venture capitalists (VC) is the size of the market and the likelihood of a strong return on investment.
On the surface, the economics of launching or investing in a FemTech product can look less compelling than it is for other technologies: the addressable market (women) is less than 50% of the global population.
Within this population, the market reduces again when we have tech for fertility or periods, because it only serves a portion of that group at any given time. There are considerations around buying power too for parts of the market, but the numbers show the FemTech market size grew from $32.44B in 2022 to $37.39B in 2023 and has a compound annual growth rate (CAGR) of 15.2% in a digital health market that has a CAGR of 16.1%.
For context, the CAGR of the global gaming industry is 12.9%, so growth in FemTech is outstripping growth in the monster market for video games.
The other factor that feeds into the funding challenge is that most venture capital firms are headed by men. Pitching the value of female-specific technologies to men is entirely possible, but it creates another hurdle.
Many FemTech businesses are founded by women too and female entrepreneurs already struggle with funding. Women-led startups received just 2.3% of venture capital funding in 2020. Research shows that female VCs are twice as likely as their male counterparts to fund women-run businesses, but then female-funded ventures are more likely to struggle to secure additional funding in future rounds.
Making the case for FemTech needs to be a joint effort. We can point to the fact the market size is growing for FemTech, meaning these products and services are within their own right a sound VC investment.
There is also a strong argument around our obligations to ensure access to healthcare for all and meet the needs of 50% of our global population.
The United Nations’ Sustainable Development Goals (SDGs) has clear gender equity and health and wellbeing goals. FemTech provides a clear opportunity to close some of the health equity and access gaps that exist.
We are also at a critical stage in the development of digital health tools and technologies, and as investment and uptake of these technologies increase, we can choose to make women’s health a priority.
Pauline Soo is the Director of Datacom Health.
