2019 was an inflection point for Femtech, a healthtech category estimated by F&S to become a $50 billion dollar industry by year 2025. In the past 12 months, Femtech received just short of $800 million in funding.
As we enter 2020, investors, scientists and thought leaders are increasingly emphasizing the need to evolve the original concept of Femtech beyond reproductive health and what concerns the female reproductive organs, to that of a lenses through which we look into health issues that impact us differently, especially those that disproportionately affect women, such as Alzheimerâ€™s or immunodeficiencies. The Femtech movement is progressing into a more intersectional territory, where otherwise non-female exclusive issues meet the specific needs of the female biology.Â
Women in leading positions at investment firms are increasingly vouching for founders addressing problems that disproportionately affect women and been insufficiently researched, or categories where thereâ€™s opportunities for better designed products and services. They are excited to see more exits this year, a clearer path to creating successful solutions with high impact, and a well-oiled funding ecosystem.
Heart disease, fertility treatment outcomes, pain management solutions… These are some of the trends and opportunities that these 3 investors expect to see in Femtech in 2020.
Vanessa Larco, Partner at New Enterprise Associates
NEA is included in the top 10 VC firms worldwide that have invested the largest total sums in Femtech. Vanessa Larco, Partner at the Venture Capital Firm, knows first hand the need for better womenâ€™s and maternal health solutions and is passionate about the femtech space, which received a total $800 million in 2019 (data from Pitchbook).
Larco led the Series B investment and sits on the board of fertility to parenting benefits and support platform Cleo, and recently joined wearable breast pump company Willow as board observer. She is bullish on the space of infant nutrition, which she considers underserved. This includes tech-enabled solutions that make breastfeeding easier for all mothers with different lifestyles and responsibilities, as well as improved infant formula solutions.
Additionally, Larco mentions menopause as a target space that hasnâ€™t been sufficiently disrupted and that offers an incredibly lucrative and impactful opportunity. After all, the generation of women approaching peri- and menopause now have more purchasing power than ever and are therefore a very interesting consumer: They want to feel good in this life stage, and yield the power to demand better solutions for their specific needs.
Larco highlights the potential of wearable tech: â€śThereâ€™s a lot we donâ€™t know about how womenâ€™s bodies work and react to different circumstances. The wearable tech Iâ€™m excited about gives us unique insights into whatâ€™s going on and how things affect us. For instance, Willow not only gives women the ability to pump more conveniently, but it also gives insight into how much breast milk youâ€™re producing when you pump. The insights we can begin to draw with this data that can help us make more informed decisions.â€ť
Finally, Larco is excited to see the effect of Progynyâ€™s IPO, as well as the few Femtech exits we saw this year: â€śWe need the investment community to see that you can make money while making a positive impact on womenâ€™s health. The bigger the exits, the more money gets invested in the space, and the more companies we will see â€” that should drive better outcomes. Itâ€™s really the boost we need to get the flywheel going. Thatâ€™s how you get a venture-funded industry going. And Iâ€™m eager to see this happen as a woman and investor.â€ť
Christina Jenkins, Lead Investor at Portfolia Femtech Fund
Portfolia launched the first ever Femtech focused investment fund in 2017, and has since invested in fertility company Future Family, vaginal health startup Madorra, genomics and diagnostics company Prime Genomics, which is developing a breakthrough approach to detect cancer, and the newest addition, Sana, an innovative device for pain management. Additionally, Portfolia has invested through others funds on menopause health platform Genneve and device company Joylux. Christina Jenkins, MD, is also an independent advisor to Elektra Health, a startup focusing on guiding women through menopause launching in 2020.Â
Jenkins believes that moving forward, as the sector consolidates, there wonâ€™t be the need for a â€śFemtechâ€ť term anymore. At Portfolia Femtech, the team has seen around 800 deals across all partners, which according to Jenkins is â€śa sign of pent-up demand but that is now increasingly being addressed. From a trajectory standpoint, we will see the space mature. Some models will fail and some will succeed. Thatâ€™s just the way it is. Whatâ€™s important is the creation of a baseline infrastructure so that companies can grow: We need more investors that can fund early stage, and subsequently more investors that play into bigger rounds. Additionally, we need to see big businesses open up to this opportunity: Why canâ€™t [femtech/sextech] companies advertise on certain platforms? Why arenâ€™t there more clinical trials on women? What policies do we need for these companies to thrive?â€ť
When discussing areas of untapped opportunity, Jenkins focuses on two main areas. First, menopause, which startup founders and investors have so far primarily stayed away from, the way people stayed away from migraines, due to its complexity, as this area covers an intersection of hormonal, mental, metabolic and heart health. All of these are areas of disease that impact women differently and havenâ€™t been sufficiently researched on the female biology. Jenkins is also excited about the intersection of these areas with sexual health – still a big societal (and business) taboo.
Secondly, Jenkins highlights womenâ€™s mental health across all life stages: â€śSo far, weâ€™ve focused on young women (pre- child to postpartum), but I want to see all other stages covered. Women have unique needs and I hope to see great solutions address the gap for health self-management. Due to my background in health systems and clinical, Iâ€™m interested in solutions that put more control in the hands of the patient in a real, evidence-based way, so they can move the needle from a population health perspective.â€ť
Kristina Simmons, Khosla Ventures
San Francisco based seed and growth stage venture capital firm Khosla Ventures has made significant investments in healthtech and innovation, including mental health startup Ginger.io, clinically-based smartphone solution HelloHeart, and oncology blood screening company Guardant Health, three solutions that intersect with womenâ€™s health. They also invested in health insurance disruptor Oscar Health.
In the Femtech space specifically, Khosla added four new exciting startups to its portfolio in 2019: Maternal-fetal health startup Mirvie, CBD-infused feminine hygiene CPG startup Daye, Breast cancer detecting wearable bra creator Eva Tech, and high-tech fertility company Overture Life, whose ambitious mission is to democratize access to reproductive technologies.
Kristina Simmons, Chief of Staff and Investor at Khosla Ventures, explains about Khoslaâ€™s belief in reinventing societal infrastructures through technology. As a fund, they sit at the intersection of impact and financial returns, and are interested in funding the non-government components of GDP. â€śWe see a lot of opportunity in healthcare: How do we democratize it? How do we apply AI to get better outcomes?,â€ť added Simmons.
Simmons looks forward to seeING the Femtech space expand in 2020: â€śIâ€™m excited about startup Alivecore. Because cardiovascular data is incredibly skewed, as traditionally healthcare has mostly looked into data from men, this company is focusing on solving that problem and developing clinical trials.â€ť
Simmons believes that we need more startups that will reinvent entire categories, as opposed to creating incremental changes. â€śWe get excited about deeper science and tech. It takes longer for these solutions to come to market, but they are truly disruptive. Impossible Foods, for instance, took years to grow and now they just announced a partnership with Burger King.â€ť Simmons highlights the case of Overture, which is implementing robotics to create solutions that will revolutionize the way we think about fertility preservation and assisted fertility solutions.
Main categories for opportunity include fertility, with an emphasis on supporting the whole journey and using data to understand positive and negative outcomes and why they happen; improved products and services for the transition to menopause; the intersection of the microbiome and womenâ€™s health and, last but not least, technology designed to help us better understand our bodies: â€śWith the use of advanced hardware and software we can now get more health data and biomarkers at a high frequency pace: Hormone levels, metabolic panels, â€¦ Having access to this data and controlling what goes on in our bodies is one of the biggest opportunities.â€ť
In the macro, Simmons is glad to see the womenâ€™s equity movement gain traction, with more pressure on funds to include women at the table, as well as on corporate boards. This shift at the leadership level will inevitably reflect on the deals that get funded: â€śThereâ€™s an education gap that is being solved by the growing numbers of women in venture capital, so everyone can understand the need for better womenâ€™s health products. Iâ€™m always mindful to have an equal number of male and female-led pitches that I present to the board. With more women getting funded, more women will be encouraged to launch companies, correcting the existing imbalance.â€ť
The Business Of Supporting Women At All Stages
The hot potato of Femtech seems to be what the most successful business models will look like, beyond selling direct to consumer. Leading startups in the space are hungry to disrupt the status quo, and there are big opportunities in collaborating with existing healthcare incumbents, which in theory could accelerate the positive impact on womenâ€™s lives. However, it seems that one of the biggest burdens founders face when growing their companies is the transition from D2C to an enterprise model.Â
Simmons agrees that disruptive solutions with aggressive consumer growth puts pressure on traditional incumbents to act, as opposed to incremental solutions which seem to struggle more. Larco adds that more money circulating in the space will attract the attention of all parties – to the best interest of all. Jenkins believes that, as of right now, the best business models will answer the question â€śWhat will compel women to spend money on themselves, and not just others?â€ť Only then large insurers, employers and hospital will pay due attention.