The #MeToo and Time’s Up movements have created (and been a direct response to) some of the biggest headlines of 2018. They have created a renewed focus on many of the lingering inequalities women continue to face in the workplace, as members of society (both in the UK and elsewhere) and in the eyes of the law – a study by the Fawcett Society in January 2018 found that the UK system continues to fail women, and called for fundamental reform to increase access to justice and offer additional protections against harassment.
Despite ongoing challenges, ever greater numbers of women from all walks of life are continuing to step into formal and informal political arenas, with a record number of women elected in the US Midterms, sparking comparisons with ‘the year of the woman’ in 1992.
Against this political and societal backdrop, $400 million has been funnelled into femtech startups.
The term “femtech” was coined in late 2016, when Ida Tin, the founder of menstrual tracking app Clue, came up with the word to describe a sector that had started to quietly gather momentum. The femtech industry, made up of largely female led start-ups focusing on women’s health and wellbeing, has developed as a result of the desire among women to seek out alternatives to hormone-derived contraceptives and has expanded to include tech specifically catering to all aspect of women’s health, including post-natal care and female specific medical conditions. Consumers are increasingly demanding a major point of difference between medical options available to them, for example in contraceptives, where all conventional options are hormone derived, rather than offering non-hormone-based options. Start-ups are increasingly filling the gap that conventional pharma companies have yet to fill, creating apps and devices for women that range from daily monitoring of reproductive cycles to new treatments for chronic long term medical conditions based on technology, rather than pharmaceuticals.
The negative impact a lack of diversity (not only gender-based) in boardrooms has on business success is well-documented. A report by Grant Thornton found that a lack of diversity means companies fail to challenge their own assumptions and bring new ideas to the table. This is having a particular effect on the ability of the femtech industry to expand. There remains a disparity between the amount male-oriented health companies can raise, and the amount female-oriented companies can expect to raise. Ro and Hims, both specialists in male specific conditions, raised over $170 million between them this year, nearly half the amount raised by an entire industry of femtech leaders. This has been partially attributed to the makeup of the boardrooms femtech leadership pitch to, with femtech leaders stating that the disproportionately high concentration of men in the investment community make their products ‘unrelatable’, leading to ‘uncomfortable’ pitches that hamper sector growth.
Market analysts Frost & Sullivan have forecast femtech will be worth $50 billion by 2025 – a rapid expansion for an industry currently made up of 200 start-ups scattered around the globe. They found that women are 75 per cent more likely to use digital tools for health than men and that working age women spend 29 per cent more per capita on health than men of the same age. Given these figures, the opportunities are clear, however, currently just 10 per cent of global investment goes to female-led start-ups.
From a political perspective, much of the drive for women to take charge of their own health has been helped along by the re-politicisation of reproductive health and women’s rights. The election of President Trump in America is frequently cited as a galvanising moment for women globally, who have become concerned by his tendency to insult women he disagrees with and brag about sexual assault prior to his election. Additionally, while in office, Trump has become known for his promotion of anti-choice judges and politicians.
Battles to normalise women’s issues have taken place in Parliament too. In 2015, Stella Creasy MP made headlines for forcing Conservative MP Sir Bill Cash to say the word “tampon” in a parliamentary debate. The image of a young, female MP persuading a middle aged male Conservative to talk directly about the ‘taboo’ subject of women’s health and menstruation was something of a milestone in a parliamentary system not known for moving with the times. Creasy made headlines again in October 2018 when, following a referendum in the Republic of Ireland in favour of ending the ban on abortion, she and fellow MP Conor McGinn successfully passed a series of symbolic amendments to the Northern Ireland Bill in Parliament forcing the Northern Ireland secretary, Karen Bradley, “to issue guidance” to explain how officials can continue to enforce the ban. Given the issue is a devolved one, the real-world ramifications are likely to be limited, but as a symbolic gesture it was a powerful one – it became an embarrassing subject for the UK government, given their confidence and supply agreement with the DUP, who are stridently anti-abortion. The DUP is unlikely to change its opposition to ending the ban on abortion, but they are increasingly isolated on the issue, with their view seen as increasingly unacceptable across all mainstream parties.
As more femtech products show that new ways of approaching female health are not only possible, but popular, investors will become aware of their growth potential and transformative effect on the health market. Elvie, a femtech start up that manufactures pelvic trainers, has just entered into a contract with the NHS that has the potential to save the NHS over £400 per female patient annually.
It hasn’t all been plain sailing for femtech companies, particularly those dealing with female contraception. In August 2018 an advert for Natural Cycles, one of the most high profile contraceptive apps, was banned by the Advertising Standards Authority after it found that their claim to be “highly accurate” at preventing unwanted pregnancies was misleading. Such headlines have caused some reputational damage for the fledgling industry, raising doubts about the viability of non-hormonal contraceptives, which remain a significant focus for femtech businesses. However, wider enthusiasm for alternatives to conventional contraception and medical treatments remains high, proving the continuing consumer enthusiasm for femtech.
Against this backdrop, femtech has the potential to make it far easier for women to take control of their own health. The consumer market is ready and willing to pay for innovative new options, as opposed to just dealing with the pain and side effects that are often dismissed as being ‘part and parcel’ of being a woman. As investors who benefitted from the consumer interest in men’s health over the last decade can attest, the personalisation of female healthcare holds benefits for both consumers and investors.