The term “Femtech” was coined by the founder of a fertility apps company in response to her experience that male investors often find it difficult to discuss products focused on women’s reproductive health. However, Femtech covers a broader product line than purely fertility-focused products, including all health software and technology products that meet the biological needs of women and the broader wellness market for all those who care. ‘identify as women.
The advent of the term is a sign of the turning point in a sector where many companies have historically struggled to finance themselves, and investors were not fully aware of the growth potential.
In Silicon Valley, the growth of venture capital investments in women’s digital health areas over the past two years has been marked, with the West Coast tech world recently seeing its first unicorn hit. Femtech’s growth in the United States has been fueled by two main factors. The first is a general perception that the VC industry must stop being dominated by men. In the United States, there has been an increase in venture capital funds dedicated solely to investing in founders and products that meet the needs of women.
The second is the realization that Femtech has enormous growth potential as a market. A report released this year by the nonprofit FemTech Focus estimated the market size at US $ 1 trillion, based on the fact that the 3.8 billion women in the world have power. collective purchase of US $ 20 trillion per year, control 85% of household spending and make over 80% of health care decisions. The report highlights that exits from businesses founded by women increased by 16% year-over-year over the period 2019-2020, while exits founded by men decreased by 2%.
The Femtech market is also expected to grow significantly in value over the next five years in Europe, where it is driven by changing regulations to meet the basic healthcare needs of women. The recent abolition of a tax on tampons in the UK and the free women’s sanitation initiative in Ireland are examples of this. Additionally, in Europe and elsewhere, the pandemic has resulted in increased attention to underdeveloped health areas, from fertility to mental health, which has led to a focus on more personalized health solutions.
Another factor accelerating the growth of Femtech has been the increasing use of digital health tools. These suit Femtech’s emphasis on individual personalized care rather than the unique approach previously applied to women’s health. Women of working age are 75% more likely to use digital health tools than men, including consumer health and wellness apps which have been one of the top five areas of research for the past few years. investment in digital health. And health issues like fertility and menopause are particularly well suited to management through apps.
Historically, women’s health issues have been marginalized, with conditions such as endometriosis suffering from a lack of recognition. Today, women’s medical expenses are estimated at $ 500 billion. However, the FemTech Focus report also found that only 4% of the pharmaceutical R&D budget is currently allocated to women’s health. This suggests that R&D in women’s health has the potential to increase exponentially and that venture capital investment in the sector will reflect a growing recognition of this opportunity.