Issue 2: The state of funding for FemTech (where's all the money?)
Issue 2: The state of funding for FemTech (where's all the money?)
Where's the money for FemTech?
Funding going into women’s health is tiny in comparison to the overall amount invested in start-ups.
Spoiler: it’s literally a tiny speck in the enormous universe that is start-up investment.
Let me give you an example.
TeraWatt Infrastructure, an electric vehicle charging infrastructure start-up, raised a billion dollars in 2022.
That's about the same amount as ALL women's health start-ups raised during the whole year.
According to PitchBook, [women’s health] startups raised around $1.16 billion in 2022, less than the $1.41 billion they raised in 2021. (TechCrunch)
So what does that $1.16billion cover?
We’re specifically talking about investment in health that is primarily for women’s health. Yet that could include solutions for health issues and conditions that solely affect women, disproportionately affect women or affect women differently.
So that includes:
period & menstrual cycle care
breastfeeding support
menopause support
female fertility support
diagnostics and recovery support for female cancers
chronic health issues
the list goes on!
And innovation for all of the above generated only $1.16bn in investment in 2022 - roughly the same as the amount that went to ONE electric vehicle start-up in one funding round.
It’s clear that women’s health is vastly underfunded in relation to demand and need. Women’s health innovation can change lives and save lives.
Yet women’s health innovation has so much economic and business benefit too.
The ‘FemTech’ market is expected to be worth more than $100bn by the end of this decade, up from $51bn just two years ago.
Not only that, the returns for investors are already showing with companies like Maven and Progyny now in excess of $1bn valuations and upwards.
And female founders are a better bet too. Startups founded and co-founded by women appear to be better investments, according to research by Boston Consulting Group. On average, women generate 78 cents of revenue per dollar invested, compared with 31 cents for men.
Which leaves me feeling just a little bit puzzled about why investment isn’t so much higher. (Actually, I know why and I’m sure you do too. That’s for another day!)
But, then I consider that just three years ago the investment levels were less than half what they are now:
The good news is that the $1.16 billion [raised in 2022] is much closer to $1.41 billion than it is to $496 million, which was the amount women’s health companies raised in 2020, and $476.8 million, the amount raised in 2019. (TechCrunch)
Look how far things have come in such a short time and look at the opportunity ahead of us.
Women’s health investment may be but a tiny speck in the universe of investment right now, but it really won’t be for much longer.
A final note from me! If you’ve read this far, thank you! This is week two of my Substack and the start of my journey shining a spotlight on the world of FemTech and Women’s health innovation. Who should I be connecting with, where can I learn more? I’d love to hear your recommendations in the comments below….