When we first came across the term FemTech in 2020, our initial reaction was “What is FemTech?”. Neither of us had ever heard about it. So, we did some research and discovered that FemTech encompasses “technology solutions such as device, diagnostic, product, software, app or services, or any combination thereof, that cater to the needs of women’s health.”
We were thrilled and shocked at the same time. How come we had not heard about this industry before? After all, FemTech companies offer solutions such as hormone-free contraceptives that many young women, including us, have longed for.
We immediately recognised the potential and relevance of this upcoming industry and were eager to learn more. So, highly motivated to investigate FemTech – a so far unexplored topic in business research – we decided to write our master’s thesis about it. Based on industry analysis and interviews with 13 inspiring female FemTech entrepreneurs from across the globe, we derived 5 key learnings from our study that we would like to share with you.
#1: FemTech Startups Fill the Gender Data Gap in Healthcare
First of all, why do we need FemTech?
Historically, women’s health has not been studied nor understood sufficiently. This is evoked by unfavourable conditions such as medical research being mostly tailored to men, and women being largely excluded from drug trials because of their hormonal cycles or childbearing responsibilities.
The lack of gender-specific research towards women has led to the gender data gap in healthcare. In fact, only 4% of the worldwide funding for R&D in healthcare is specifically designated for women’s health although women account for nearly 50% of the world’s population. Consequently, many health issues unique to women of all ages and health issues that predominantly or differently affect them remain poorly understood.
Closely intertwined with the lack of scientific knowledge, we also found that the presence of taboos and stigmas surrounding women’s health issues is leading to a lack of awareness for women’s health. In many cases, women themselves do not know or understand female health issues such as endometriosis or PCOS.
As a result, the FemTech market is still largely underserved and there is a high need and demand for products and solutions tailored to women’s health issues. Particularly, in developing countries where appropriate screenings and treatments are not ensured, gender-specific treatments and personalised solutions are crucial.
#2: The FemTech Industry Is a More Level Playing Field for Women
Knowing about the unequal gender distribution in tech entrepreneurship, the high female representation of entrepreneurs in the FemTech industry stands out. While only 14.1% of tech entrepreneurs worldwide are women, more than 50% of FemTech startups are founded or led by women.
So, why are there so many more female entrepreneurs than usual?
The subsumption under the industry term FemTech enables entrepreneurs to present their solutions in a less stigmatised way – especially when talking to male stakeholders (e.g., investors) – and it clearly signals the industry’s female focus.
This association with femininity and the female dominance in terms of entrepreneurs and end-consumers make the FemTech industry more accessible for women and potentially more encouraging to female entrepreneurs than other male-dominated parts of the tech industry.
FemTech allows female entrepreneurs to be on a more level playing field compared to other parts of the tech industry
In addition, the FemTech industry offers female entrepreneurs a platform to advocate for women’s health and tackle gender inequalities whilst pursuing lucrative business opportunities in a so-far untapped, highly promising and non-male-dominated tech space.
Overall, our analysis suggests that the FemTech industry is a different playing field for female entrepreneurs in tech. It allows female entrepreneurs to be on a more level playing field compared to other parts of the tech industry and thus, a beneficial playing field for (aspiring) female entrepreneurs.
#3: FemTech Entrepreneurs are Driven by Mission and Attracted by Blue Ocean Opportunities
Why do so many women start their business in the FemTech industry?
A key insight that emerged from our interviews with the FemTech entrepreneurs is that their decision to start a venture in the FemTech industry is predominantly driven by two factors: their mission and the industry’s blue ocean opportunities.
Whether it is out of a personal need or triggered by the huge gap of research and knowledge about women’s health, their decision to start a company in the FemTech industry is highly driven by their personal care for women’s health and their mission to positively impact women’s lives, ultimately empowering them through better and more accessible healthcare solutions.
Their decision to start a company in the FemTech industry is highly driven by their personal care for women’s health and their mission to positively impact women’s lives
At the same time, our study’s interviewees point out the largely underserved market with a high need and demand for innovative products and solutions targeting women’s health. Therefore, all of them recognise the attractive business opportunities in the FemTech industry.
#4: The Highly Underfunded FemTech Industry
Both from our industry analysis as well as the analysis of the female entrepreneurs’ experiences, it stands out that fundraising represents the main barrier in the FemTech industry. Only 1.4% of aggregated capital flows into the FemTech industry, representing a minuscule fraction of capital flowing into healthcare.
Even in 2020, which has been the record year for global healthcare funding, investments into FemTech companies account for a very small fraction. Undoubtedly, fundraising is challenging for any founder.
However, there are some aspects that increase the difficulty and complexity of fundraising in the FemTech industry – the lack of awareness and stigmas surrounding women’s health being a major one. Hence, FemTech entrepreneurs give their best to educate investors and society to overcome this challenge.
Nonetheless, despite the positive investment trends in recent years and the growing interest that FemTech is receiving, the fundraising barrier persists. It blocks the development and growth of FemTech entrepreneurs and their startups.
#5: The Flip Side of Being Part of the FemTech Industry
Lately, more and more articles and reports about FemTech are published. An increasing number of panels about women’s health issues are organised. Designated accelerators are launched. VCs are getting interested in FemTech. The FemTech industry is on the rise.
However, being in a hot space may also have its flip sides. Companies within the FemTech industry might be lumped together. If one makes a mistake or fails, it might lead to other FemTech companies being scrutinised for it.
Some of our interviewed founders perceive a certain pressure to succeed in the FemTech industry. A pressure to prove it as worthy since the industry is still in its early stages and the potential needs to be unfolded.
Moreover, they feel that by labelling their companies FemTech, they are distinguished from the norm (i.e., the remaining tech), decreasing the value of being a tech entrepreneur. Concerns have also been raised regarding conflating female entrepreneurs and FemTech as it might signal that women can only do women’s health and do not dare to start companies in areas they cannot easily relate to.
For us, the label FemTech gives female founders a voice, empowering them with their endeavours and ultimately women altogether
While these concerns should be kept in mind and considered, it also emerged that labelling the FemTech industry as such has created a safe and legitimate space for women in tech and is vital for their empowerment.
For us, the label FemTech gives female founders a voice, empowering them with their endeavours and ultimately women altogether. We are excited to see the FemTech industry expanding until hopefully one day there is no need to call it FemTech anymore, but it will just be TECH.