FemTech: the world’s largest ‘niche’ market

“FemTech investment is approximately 2% of the overall health sector,” says Marion Jeng, an associate at DAI Magister. Image Credit: President KUMA / Shutterstock

A​​​​​​​lthough women make up approximately half of the world’s population, women’s health is often considered a niche market. Despite technological advances across the medical field, FemTech is still perceived as a mere subset of the healthcare market, resulting in a lack of innovation and funding. 

But there are signs this is changing, with increased interest in recent months. Last month, the US White House and the First Lady, Dr Jill Biden, released $100m in federal funding towards women’s health as part of the White House Initiative on women’s health research. The funds will be directed towards early investment in research and startups. 

However, total funding for women’s health pales in comparison to the overall healthcare sector.  

"FemTech investment is approximately 2% of the overall health tech sector," says Marion Jeng, an Associate at boutique investment bank DAI Magister. 

Currently, only 4% of traditional biopharma research and development (R&D) funding goes into female health conditions, despite women spending nearly twice as much on healthcare as men, says Audrey Tsang, CEO of period tracking app company Clue. 

“When you do not have data showing that there is an issue, then you have nothing to solve,” says Tsang. “This leads to a lack of innovation and R&D along with a lack of empathy and understanding of women’s health issues.” 

Beyond being a barrier to developing new solutions, a lack of data can also lead to a lack of personalisation of existing solutions, according to Sylvia Kang, CEO and co-founder of FemTech hormonal health company Mira. 

Data serves a lot of different functions – it enables companies to define problems, help in obtaining regulatory approval and estimate the market size.  But the investment field is still male-dominated, says Jeng. Generally, there is gender bias and a lack of awareness of women's health issues but having data-backed solutions can improve investor confidence. 

Erica Opare, co-founder of UK-based FemTech startup Lira Health, says that although the current focus on increasing the information base regarding epidemiology and the market size FemTech sector is useful in attracting investment, there is not enough data, currently, to show a return on investment.  

Obtaining financing for pilot studies is very hard, according to Opare. A lack of awareness and empathy for women's health issues can make securing funding for these conditions relatively harder. To overcome the lack of data challenge, a lot of FemTech companies are conducting research either in-house or in partnership with hospital and academic institutions. 

Clue has partnered with multiple research institutes, including the Menarche, Menstruation, Menopause and Mental Health (4M) consortium and the University of Exeter. Mount Sinai is conducting a study on the effect of long Covid on the female cycle using a Mira monitor to track the hormones of study participants. 

Both Tsang and Kang say that the users of their applications report a high appetite for research participation, with approximately 80% of Clue users consenting to use their data for research purposes. 

The growing investment and interest in FemTech is driven by feminist movements and the rapid digitalisation of healthcare, says Wafaa Hassan, senior digital health analyst in pharma at GlobalData. 

But, although investment in FemTech is showing an overall increasing trend, there are short periods of little to no investment activity interspersed throughout the years. According to Hassan, social media platforms such as Instagram and TikTok have contributed to increased awareness of women’s health, thereby, promoting investor interest in the area. 

“There has been a shift in mindset in recent years, with bigger investment companies such as Lux Capital and Google Ventures backing FemTech companies,” says Jeng.  

However, the current FemTech space is mostly populated by companies with a business-to-consumer (B2C) model which is not appealing to investors due to scaling, monetisation and retention concerns. However, many B2C companies are moving to a business-to-business (B2B) space, one such example is Clue’s partnership with Oura Ring and Kindbody's partnership with Quantum Health, which increases the investment appeal of FemTech companies and in turn drives investment. 

A recent FemTech app in the B2B space is the frendo digital app. The app launched an employee support programme for endometriosis in February. Employees can access frendo’s endo screening, tracking and community support through the app. The app also offers pelvic health, pain management, fertility, and other programmes for employees. 

Jeng adds that another way to attract investors in the sector is the ability to visualise an exit. From an investor perspective “history is the best predictor of the future”. Therefore, having FemTech companies reach a level of maturity to generate a successful exit, whether it be a successful IPO or an acquisition will increase investor interest in the area. 

There can be a gender bias in investment and female investors usually have low decisional power compared to their male counterparts as they represent 12% of decision-makers at VC [venture capital] firms, says Jeng. In addition, this can be compounded by another bias, where a FemTech company funded initially by women-led VC can create a perception that primary funding was not based on merit. This makes it hard for the company to secure further funding, compared to a company that received primary funding from a male investor. 

Fertility and period tracking apps are high-grossing segments in the FinTech sector. Clue recently added Clue Perimenopause as part of its portfolio. The app is a CE-marked Class 1 medical device that includes 14 perimenopause-specific symptom-tracking options such as hot flashes, night sweats, brain fog, and vaginal dryness.  Mira also offers hormonal health virtual consultations. 

Big data and artificial intelligence (AI) are also expected to be major trends in FemTech, says Hassan. Mira uses AI to analyse a person’s cycle and provide personalised suggestions and the app can prompt its users to seek medical help based on the cycle analysis. 

One growing segment of FemTech is AI-assisted breast cancer screening platforms. In November 2023, GE HealthCare launched the US Food and Drug Administration (FDA) approved MyBreastAI suite. In June 2023, Paige launched a new suite of AI tools to help in breast cancer diagnosis. 

Another growing segment in FemTech is menopause. Menopause is something every woman experiences, and they spend approximately a third of their lives in a menopause-related state, says Jeng. There is growing awareness regarding menopause, says Tsang, adding that approximately 25% experience severe symptoms during menopause and require support. Menopause is one of the areas that Clue is very interested in supporting, says Tsang. 

The term ‘FemTech’ was first coined by Clue co-founder Ida Tin in 2016 to define services and technology tailored towards women's health. Since then, it has grown beyond consumer-centric mobile apps. FemTech services are now obtaining regulatory approval and reimbursement for indications beyond fertility. The companies in the space are now developing solutions for other women's health conditions such as menopause and endometriosis.  

With the FemTech space gaining more awareness and investment, we are likely to see more innovation in the sector. Furthermore, the increased integration of disruption technologies including AI, telehealth, remote monitoring, and wearables are likely to propel growth in the field.