Bringing 'Femtech' into the Mainstream: VC Interest Grows as New Frontier for Women's Health Beckons

As VC interest rises, the femtech market is expected to grow at an exponential rate.

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The term "femtech" was recently brought to prominence by the founder of a fertility app in reaction to her struggles in finding male venture capital investors who would find it difficult in understanding the specifics of her product. However, with the industry forecast to total $75 billion in value by 2025, there are plenty of indications that VCs are waking up to the potential of femtech.

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In Silicon Valley, there have been clear developments in the level of VC investment in women's digital health since the beginning of the Covid-19 pandemic. The United States, in particular, has played host to a rise in the level of VC funds dedicated solely to investing in female founders and into startups focussed on addressing women's needs.

One of the most important factors behind the growth of femtech is the realization of the industry's significant potential. According to a report by the non-profit organization, FemTech Focus, the potential of the femtech market can total $1 trillion — based on how the 3.8 billion women around the world have a combined spending power of $20 trillion per year whilst controlling around 85 percent of daily household spending — as well as making more-than 80 percent of healthcare decisions. The report also noted that exits by female-founded firms increased 16 percent year-over-year between 2019 and 2020, whilst male-founded exits fell by 2 percent over the same timeframe.

The femtech market is expected to grow at an exponential rate. As data shows, North America and Europe are set to drive the market, whilst treatment-based technology appears set to dominate the industry alongside diagnostics.

"The global FemTech market was worth $40.2 billion in 2020 and is projected to grow at an average of 13.3 percent per annum from 2020 to 2025 to reach $75.1 billion," said Maxim Manturov, head of investment advice at Freedom Finance Europe. "North America is the undisputed leader. Comprising almost 55 percent of FemTech companies, it far surpasses other regions. Europe is second with 25 percent, followed by Asia with 8 percent and MENA countries with 7 percent."

"The U.S. and the UK are the two countries with the largest number of FemTech companies. Despite growing interest in recent years, the industry remains undervalued and has high growth potential."

Battling underrepresentation in healthcare.

The rise of femtech could bring far greater improvements for women's health than the development of dedicated tech. The industry could generate a far better level of representation for women when it comes to gender-based variations in healthcare.

Literature like Invisible Women (Penguin Random House, March 2019), Doing Harm (HarperOne, March 2019), and Sex Matters (Hachette Book Group, June 2021), modern medicine was developed around male physiology, with women often underrepresented.

There's also a widespread predisposition to the male body type within the field of medical training, diagnoses, and therapeutic development, which has impacted how physicians and scientists work on understanding the human body. As a result, women can often have very different health outcomes to men when undergoing treatments.

Although this isn't always the result of gender bias, for instance, the U.S. Food and Drug Administration (FDA) advised against "premenopausal female[s] capable of becoming pregnant" being included in Phase 1 and early Phase 2 clinical studies, but it's led to an increased need for women to gain better representation when it comes to health matters.

Signs of market growth.

The femtech industry has recently received a boost as German health startup Wellster Healthtech Group closed a $20 million funding extension, which has brought the total level of funds raised to $60 million.

The company announced that it intended to use the revenue to launch a brand specifically within the realm of femtech — which is set to focus on developing software designed to aid insights into fertility solutions, menstrual tracking, pregnancy, and nursing care among other aspects of women's health.

"The funding comes at a key moment in our development," said co-founder Dr. Manuel Nothelfer in a statement. "It reinforces our goal to be the leader in the European market and our offerings for personalized healthcare services to expand."

Wellster's impressive funding comes as the latest indicator of an industry that's ready for exponential growth. The company's shift towards the femtech sector illustrates the sheer volume of opportunities that companies can access in providing women with the healthcare solutions that they've been deprived of throughout their lives.

With a projected market share of more than $75 billion forecast by 2025, the firms that opt to expand into femtech are likely to be rewarded by sustained and ever-increasing custom from a market that currently spans some 3.8 billion people.

With this in mind, venture capitalist interest may hold the key for a brand new frontier for women's health. Although barriers still remain in a largely male-dominated industry, the future certainly looks bright for femtech — and the companies that are working so serve their female audience.