Spurred on by the Covid-19 pandemic, women’s digital health startups saw a huge increase in funding last year, revealing that an area once considered too risky or niche by the venture capital world is finally getting recognized.
In 2020, funding for women’s health digital startups rose 105% to $418 million, spread over 22 companies––nearly twice as many women’s health companies from the prior year. That’s according to figures from San Francisco-based venture fund Rock Health, as reported by Bloomberg.
In total, there are about 55 “femtech” companies, or businesses that focus on digital healthcare apps and services for women. Many are already widely-used by millions of women, such as menstrual tracking app Flo or on-demand healthcare services company Nurx.
It’s surprising that venture cash has been so limited in the past on women’s health solutions, since women make 80% of the healthcare decisions at home and spend 29% more than men per capita on health care, according to the Department of Labor. However, only 3% of VC deals since 2011 have gone to women’s health. Put another way, there were only 15 femtech deals in 2019.
“The healthcare market is a four-trillion-dollar industry,” Rock Health CEO Bill Evans told Bloomberg. “Women’s health is a small piece of that but there are significant un-met needs among women today that are more overlooked than other areas.”
A lot of VC funding that does get funneled into women’s digital health companies is also centered around fertility and reproductive care, but there are so many more opportunities that could address larger healthcare needs for women. Even the term “femtech” is somewhat debated, with many believing the term is too narrow or comes with its own connotations. Addressing the Black maternal health crisis, improving sexual education for young women and adolescents, or offering support for caregivers––who are overwhelmingly women in the U.S.––are all areas ripe for innovation, according to Rock Health research fellows.
“Proving the return on investment is the hardest thing for most healthcare companies––proving it for women’s health is harder, even if we may have overcome the barrier of belief that women’s health opportunities are significant,” Evans said.
In 2020, the biggest funding deal came to Sema4, a startup that conducts prenatal testing, carrier screening and hereditary cancer testing. The Stamford, Connecticut company received $124 million in funding. Second on Rock Health’s list is Willow, a breast pump maker that snagged a $55 million deal, followed by $45 million in funding for Maven Clinic, a virtual health hub, according to Bloomberg.
From grocery stores scrambling to ramp up their digital capabilities to fulfill online orders and Ikea unable to deliver kitchen cabinets in a reasonable time due to a surge in demand, the Covid-19 pandemic brought on a lot of change for most industries. That was true for women’s health, as well, as many digital health startups and established companies quickly expanded to meet a rising interest in telehealth. Nurx, which specializes in at-home birth control and other healthcare screening services, expanded to offer acne and migraine care. Compared to men, women are more affected by migraines. Nurx has raised nearly $116 million to date.
While the opportunities exist for women’s health companies to tap into new solutions imminently, convincing the male-dominated VC world to invest is still a slow-trudging battle.