Femtech, the pseudonym given to tech firms in the digital health world and beyond that focus on women’s health issues, has been subject to a great deal of media hype in recent years.

From trade to mainstream press, companies developing devices to speed along conception or enable remote monitoring of pregnancy and labour have enjoyed increasing press interest. But concrete investment doesn’t seem to be matching up to the buzzy atmosphere surrounding the sector.

Despite 2020 being a record year for venture capital overall – with deal value rising 14.8% year-on-year to reach €42.8bn in Europe – and a landmark year for digital health, femtech funding was seen to decline.

Frost & Sullivan partner and senior vice-president for healthcare Reenita Das says: “If we look at femtech investments over the last few years our stellar year was actually 2018, where we got roughly 6.6% of total digital health funding. Last year was a really bad year for femtech. That 6.6% declined to 1.8%.”

Das says that even though digital health investment reached over $14bn dollars last year, femtech fuding made up only $254m of this. While this can be attributed in part to the Covid-19 pandemic, where investment in remote monitoring technologies and telehealth fed the digital health sector, this only explains part of the story.

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Why can femtech companies struggle to get investment?

Femtech companies can be up against a number of hurdles when they seek investment that other companies may not face, not least the fact that the majority of venture capitalists are still men, who may not understand why femtech products are necessary or take pitches from female entrepreneurs as seriously.

Private Equity News reports that when Eva Galant was pitching to investors to raise money for Hashiona – an app she founded for patients with Hashimoto’s disease, an autoimmune disease that affects the thyroid gland and is four to ten times more common in women than men – she likened the effects of the illness to a hangover.

It was the best way to create a connection between the lived experiences of women with Hashimoto’s and the male investors, who didn’t know much about the condition.

Das says: “A lot of the times when women are pitching for money in the venture capital world, they’re pitching to males who don’t really understand what the challenges are. When they don’t understand it, they’re not able to see the opportunity.”

Some commentators also see outright biases standing in the way of femtech funding, particularly when it comes to start-up ‘unicorns’ – super-funded, fast-growing young companies.

Entrepreneur accelerator programme Femtech Labs founder Karina Vazirova says: “There is a certain stereotype of a successful ‘unicorn’ founder. Whether investors want to admit it or not, that stereotype is usually male, with extreme confidence, promising a superstar exit and exponential growth.

“Women are different than men as leaders and entrepreneurs, especially when it comes to communication. We also have a different style when it comes to fundraising, usually much more risk averse and conservative. It does not mean that women are less likely to build a unicorn, but we can’t ignore how these gender differences impact investment decisions.”

Clear skies ahead for femtech

Femtech funding may be struggling to get off the ground right now, but this lull in investment isn’t expected to last.

Vazirova says: “FemTech, as a sector, is still young. As with any young sector, there are still many unknowns so it’s harder for investors to assess risks, evaluate the market opportunities and develop a thesis. There are still more success stories to see, and the way investors think about the market is still shaping. This is completely natural for any growing sector.”

Frost & Sullivan predicts that the market will be worth $1.15bn by 2025, with Das predicting that fertility and menopause-related technologies will lead the charge. As the global population ages, older women are likely to come forward expecting the same hi-tech solutions for their health issues as younger women.

“By 2030, women between the age of 15 to 40 will be 37% of the world’s population of women, whereas menopause and senior care women will be about 38%,” says Das. “Part of the job that I’ve been doing now is trying to showcase that huge opportunity that exists, that in terms of market size is exactly the same as reproductive. I feel the menopause sector will have a 15%-19% growth rate over the next few years.”

Alongside menopause-related technologies, other age-related conditions which impact women are still an untapped market for femtech to target.

“25% of women will be over 60 within the next seven or eight years, and there are very few resources for them,” says Das.

“Women suffer from Alzheimer’s and Parkinson’s much more than men do, and there’s many more female related elderly diseases that we don’t even have solutions towards. That’s an area I’m really working on and trying to look at, what are the needs of senior women going to be, women in their 70s and 80s?”