Why Women's Health Is At The Forefront Of Tech Investment
According to The Economist, women's healthtech focuses on solutions which aid most of the world's 4 billion women at some point in their lives, creating a huge potential market.
Innovation and startup activity in women's healthtech is increasing at an astounding rate. These startups, more and more which are led by women, are addressing challenges beyond "obvious" female health issues such as menstruation and fertility, but incorporating everything from hormonal awareness to sexual empowerment.
According to The Economist, women's healthtech focuses on solutions which aid most of the world's 4 billion women at some point in their lives, creating a huge potential market. This is in contrast to heathtech aimed at men, which often focuses on conditions which affect just a fraction of the male population, such as erectile dysfunction (estimate are 10-20% of the male population). In fact, market predictions show women's healthtech is forecast to grow to US$60 billion by 2027.
In addressing this vast opportunity, $14 billion has been invested- to put this in context, this is 3% of total healthtech funding to date. While it seems that the investment community is waking up with 2021 significantly up on previous years, this remains a remarkably untapped sector for venture investment, where women are leading the way.
A deep-rooted bias
There are multiple reasons that prohibit women's healthtech in securing funding for their growth. One of them is that women's health challenges have often been associated with taboo themes, such as menstruation, menopausal symptoms or incontinence. For example, The Guardian reported that less than 3% of publically funded research was into reproductive health, although around 30% of all women will suffer from a related issue. Premenstrual syndrome, which affects 90% of women, has had only 20% of research done as compared to that on erectile dysfunction.
Another underlying factor is that female issues have often been overlooked by the medical science, where for conditions that affect all humans, men are more commonly studied. Traditionally women's bodies were seen as too complex due to hormone fluctuations, and thus often excluded from clinical trials. One of the key underlying issues is the existing bias persisting amongst largely male investors who often prefer to fund all-male teams- a trend which Dana Kanze, Professor at London Business School, cited as "homophily," or the tendency for investors to fund those from similar backgrounds. In the words of European Women in Venture Capital (VC) founder Kinga Stanislawska, investors prefer investing "in founders that are most like them."
A call for female investors
One part of the solution is a step change in the number of female investors. Women are more likely to invest in businesses that are supplied by, led by, or catered to women, as they are more empathetic to issues unique to women, and will have an innate understanding of what they want as consumers.
A Kauffman Foundation study of female entrepreneur funding found that VC firms with female partners were two times as likely to invest in startups founded by women, and over three times more likely to invest in startups with female CEOs.
To bridge the gender investment gap, the European Commisssion's Gender Smart Financing document additionally recommends actively seeking female-led companies as targets for investment and supporting pitching by female entrepreneurs, creating new funds with a gender focus, and encouraging serial female entrepreneurs to become investors/business angels themselves.
Actively seeking such investment is the basis of "gender lens investing," which invests for financial return, while also considering the benefits to women. Gender lens investing is spearheaded by VC funds such as my company, Mindshift Capital, which has recently invested in Rosy, a women's sexual wellness platform founded by obgyn Dr. Lyndsey Harper.
Founded in 2018, Rosy is focused on providing women with access to a range of services and benefits to boost and manage their wellbeing, including sexual health guidance, and a host of expertly created educational resources including videos and self-help materials. As part of its $2 million seed round, Rosy was able to make key hires for the business, and focus on product development and marketing expansion. The funding will help the team at Rosy to continue with its growth and expansion of the membership base, and seize the huge opportunity in the sexual wellness market.
Women's healthtech is a hot space for venture capital investments. As women make up nearly 50% of the population, there is never going to be a shortage of consumers. With so many women unhappy with the current care on offer, there are endless opportunities for investors to not only support high-growth businesses and generate premium returns. They also have an opportunity to drive change and diversity in the global venture system, and invest in extraordinary female leaders who will inspire the next generation of founders.