The market for women-focused health products (aka “femtech”) is set to grow via segmentation, according to an analyst note from PitchBook that identifies opportunities for entrepreneurs to target a growing number of health issues that affect specifically women or affects women in a way – expanding from a traditional focus on reproductive health.
Femtech remains a “significantly underdeveloped” slice of health technology, according to the analysis, which highlights the disparity between women’s annual spending on medical expenses – estimated at around $ 500 billion – and the little. of healthcare R&D specifically targeted at women’s health issues (barely 4%).
Last year, the global market for women’s health products generated $ 820.6 million, according to the note, and is expected to reach at least $ 3 billion by the end of 2030. It indicates that femtech completed $ 592.1 million in venture capital investment in 2019, slightly down from 2018. $ 620.3 million. But so far this year, it has amassed $ 376.2 million in venture capital across 57 deals, which allows it to match 2019 funding levels.
Areas of growth opportunity that PitchBook sees for femtech outside of its traditional focus on reproductive health are: endometriosis, a painful disorder of the lining of the womb affecting one in 10 women; what he calls “personalized, woman-centered approaches to general health and disease management”, with particular emphasis on heart health, pain management, diabetes and weight management in this framework ; and the life stage transition from menopause.
“While we still view femtech as a niche industry, we believe that age-old drivers could help propel new growth opportunities into the space,” write analysts Kaia Colban and Andrew Akers. “These include the growing representation of women in the venture capital-funded tech community, increasing awareness and acceptance of women’s health issues, and the increasing prevalence of infectious diseases among women in some African countries. and Asia.
“Additionally, while the majority of femtech products have traditionally focused on reproductive health, we believe that new approaches to women’s health research will help open the door to new products and services. “
The expansion of the vertical is driven by the universal growth of the personalized medicine industry – which according to PitchBook is expected to reach $ 3.2 trillion by 2025, registering a CAGR of 10.6% over the course of the forecast period.
While the massive under-representation of women in the venture capital community largely explains the relative lack of attention investors have given to products focused on women’s health – the note acknowledging that the presentation to male investors remains a challenge for femtech startups – this suggests that investors have also been cool on the subcategory due to a relatively poor track record of “big” exits.
“Only six femtech releases were finalized in 2019; However, this still represents a 64% increase in output value over 2018, ”he writes. “The most significant exits in recent years include the IPO of Progyny for $ 130 million and the acquisition of This is L. by Procter & Gamble for $ 100 million. Progyny’s shares roughly doubled in the eight months since its IPO.
PitchBook says it expects just 14% of venture capital to go to startups founded by women this year, further noting that only 17% of startups have at least one female founder. (For femtech startups the figure is considerably higher – but still alone 69% of those PitchBook tracks; NB, this does not include startups creating products intended for women where there is is not medical need, such as skin care and beauty, etc.)
“However, we believe these barriers may fade as male investors begin to recognize the opportunity of the femtech market and the venture capital world becomes more gender diverse,” he adds, noting that women-founded businesses report more than twice as much per dollar invested as their male-owned counterparts, which she said could help turn the heads of more investors.
The other main drivers of industry growth mentioned in the note are an enabling regulatory environment; an increase in preventive medicine and holistic health; and advancements in healthcare technologies that have made personalized products more accessible and affordable, such as AI and “cloud-based information”.
On the M&A front, PitchBook notes that this is most common for femtech startups in the general health and wellness category. And although most remain single-product companies, he says he expects a maturing femtech industry to lead to product diversification – “potentially driven by mergers and acquisitions” – noting recent examples of pregnancy-focused apps tapping into the menopause market, what he says suggests a growing opportunity for fertility startups.