2021 has been a pivotal year for the FemTech industry, with global venture capital investments crossing the $1 billion mark for the first time, according to data from PitchBook. When Ida Tin, co-founder and president of Clue, a period and ovulation tracking app, coined the term “FemTech” in 2016, funding for these startups hadn’t even reached half that amount.
This global market was worth $40.2 billion in 2020 and should reach $75.1 billion by 2025led by North America as the clear leader (55% of companies) followed by Europe (25%) and Asia (8%). Despite growing interest from venture capitalists and business angels in these applications in recent years, the sector remains undervalued and yet has strong growth potential.
Dynamic women’s businesses, close to stock market listing
The term FemTech brings together companies that have developed technologies intended to improve the health but also the overall well-being of women. In recent years, new start-ups have developed and launched sophisticated digital tools targeting women while attracting significant investment in the sector. The market is driven by behemoths such as Flo Health, which has developed an artificial intelligence-based female health app to support women at every stage of their life cycle. The company has raised a total of 75.5 million and its valuation is estimated at 800 million in 2021. Meanwhile, Progyny, which helps manage costs and find resources for fertility treatment, is currently trading at $37.10, or 186% above its offering price ($13).
This is proof of the development and interest in these companies, even if many of them are still underfunded. Despite the industry’s tremendous growth, too many investors still look the other way when they hear about FemTech, and that’s unfortunate.
Obstacles still present
The sector remains undervalued, in particular because of the many taboos still present (menstruation, sexual well-being, fertility or even menopause, etc.). In recent years, sexist rhetoric against female tech companies has only tarnished their image and repelled investors. Obtaining capital is thus the greatest challenge for the latter despite the freedom of speech on these women’s issues. On the other hand, reaching decision-makers (mostly men) who control budgets and getting them to understand the business case and growth potential of solutions for women is another challenge. FemTechs still face the lack of research, funding, education and cultural acceptance of women’s health as a priority.
At a time when the first unicorns are appearing in FemTech but also exponential investments in health in general, such as the exceptional valuation of Doctolib at 5.8 billion euros after its fundraising of 500 million euros on March 15, 2022, the strong potential of the sector for investors becomes an obvious opportunity to seize.
Tribune by Maxim Manturov, Head of Investment Research at Freedom Finance
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FemTech: a buoyant market serving women that still needs to convince investors – Forbes France
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