The Next Frontier Of Femtech 

By Ari Wright

The femtech category, dedicated to innovative solutions tailored to women’s health, is at an inflection point. But while this realm brims with potential, it presents complicated dynamics that startups must navigate.

In particular, two major challenges block big outcomes in the space.

Willingness to pay

The landscape of femtech presents a paradox. Although women are diagnosed on average much later than men, and are uniquely and disproportionately impacted by a wide range of indications, historically these disparities haven’t cost the healthcare system much (although a recent McKinsey report points to a trillion-dollar gap/opportunity).

As a result, there is generally low willingness to pay by insurance companies and low total addressable markets for new solutions addressing women specifically.

The result: Women bear the burden of the information gap highlighted above by paying more out of pocket on average and going outside the traditional healthcare system to address their health. This has in part given way to a $5.6 trillion wellness industry (with women representing 80% of consumer spending) — not far from the $7.7 trillion global healthcare industry.

More data is needed to reveal the business case for better women’s healthcare. There are ample efforts underway on this front that will play a pivotal role in unlocking capital.

The massive information gap

Female biology is more complex to study given its cyclical nature and its precious creative potential. While a 1977 ban on including women of childbearing age in clinical trials was lifted in 1993, underrepresentation persists and female patient recruitment is challenging.

More and better women’s health data is a prerequisite to creating a better “foundation model” of female biology. With a better basis of understanding of sex-based differences in disease, industry can unlock high-value, personalized therapies for females.

Placing greater emphasis on understanding the specifics of female biology comparatively has the potential to unveil insights into the mysteries of aging, the brain, and the immune system, all of which manifest differently in women.

The recent $100 million ARPA-H “Sprint for Women’s Health Research” program has the potential to play a major role in addressing this issue. In addition, startups have an opportunity to generate quality data that can be leveraged to advance the field.

Women are fired up about advancing biomedical research for women and are willing to participate by sharing their data. Building consumer trust with high integrity and navigating data privacy is critical.

Venture-backable femtech companies will likely come in two flavors

Platforms that reimagine healthcare or biotech for females: There is opportunity for deep-tech-enabled healthcare offerings (virtual or physical clinics) designed to understand and treat females more personally by embracing the diversity and complexity of biology. They will approach standard of care through an integrative lens, draw in cutting-edge research — which can take years to integrate into medical practice — and may pull in nontraditional wellness therapies.

On the biotech side, there is opportunity for companies to interrogate the mysteries of female biology with better models to discover and develop new therapeutics. Most preclinical research is conducted on mice which don’t model female biology accurately (e.g., they do not go through menopause). With advances in genetic sequencing, machine learning and lab-grown human tissue modeling, industry can better understand  female biology.

Beachhead product + data: There is an opportunity for rigorous, research-driven companies to launch a single product to serve an unmet need unambiguously while simultaneously building valuable proprietary datasets.

A nonhealthcare example: Insights around online purchasing data didn’t exist before Amazon. After nailing its initial, narrow product-market fit (selling books online), the company leveraged its position to become a $2 trillion company. To do this effectively, the initial product must propose a clear, obvious value proposition with a meaningful enough advantage over the status quo.

Asking females to pay for something that’s incrementally better than something they’re getting for free or have already tried is not going to cut it. There is a massive consumer base ready to be delighted with quality femtech, but establishing a true value proposition that will drive adoption and engagement (i.e. willingness to pay) can’t be taken for granted.

Whether device, digital therapy or diagnostic, there is opportunity for companies that can resonate with females around an initial product-market fit.

We disagree with the premise that femtech isn’t getting funding because of a lack of female investors. Investors will chase deals with large markets and potential outcomes. There is curiosity and eagerness from generalist VCs to find the companies that will redefine care for women.

Today’s femtech companies are true pioneers, and will have to address challenging industry dynamics. We believe the companies that are able to do so will not only attract venture capital, but will pave the way for many more data-driven products, therapies, and services for females, inspiring new levels of physical well-being at every stage of life.

Ari Wright is a principal investor at Bison Ventures, where she leverages her interdisciplinary background to focus on biotech and climate. Previously, she spent five years at Braemar Energy Ventures, an early pioneer in climate and sustainability venture capital. She also spent three years at Global Holdings Management Group, where she led hospitality real estate acquisitions and development, helping to build out the firm’s international hotel platform Lore Group. Wright has a bachelor’s degree in biomedical engineering from Brown University, a master’s degree in engineering green technology from the University of Southern California, and an MBA from Harvard Business School.

Illustration: Dom Guzman

Clarification: This story has changed since its original publication.