Comment: Socio-economic challenges facing the femtech industry

In an industry projected to hit US$50B as soon as next year, femtech founders—of whom 80% are women—receive only 1.9% of global VC funding. This funding limitation hinders the development of products, services, and technologies that could improve women’s lives, provide more affordable and better options, and challenge taboos surrounding women’s health.

Funding for femtech startups is challenging because venture capital predominantly resides in a male-dominated ecosystem. The lack of female representation leads to an undervaluation of women’s health issues, as these don’t directly relate to male investors.

People tend to invest in individuals who resemble them and products that align with their experiences. This simple fact means that before we can focus on building femtech, we must address the capital discrepancies—female founders have received less than 3% of VC funding since 1994.

Take Nurx for example, a telemedicine platform offering services like birth control, STI testing, and PrEP. It faced significant hurdles in securing venture capital, largely due to gender biases and the undervaluation of women’s health solutions. Initially, the company struggled to attract investors, as male-dominated VC firms often viewed women’s health as a niche market. Moreover, the politically charged nature of reproductive healthcare services made many investors hesitant.

This lack of funding delayed Nurx’s expansion into new markets and its ability to offer a wider range of services. While Nurx eventually raised significant funds, its early struggles highlight how venture capital biases can impede the growth of femtech companies, limiting their potential to address critical healthcare gaps for women.

Even more concerning than market delays due to funding issues is the lack of affordability and access for consumers. Many excellent products remain out of reach for the women who need them most. A 2022 survey by the Kaiser Family Foundation (KFF) found that nearly 30% of women reported skipping or delaying medical care due to cost, compared to about 22% of men.

The gap widens among low-income women, with over 50% reporting difficulty affording healthcare. Lack of insurance coverage for certain products, such as fertility treatments or menstrual health products, exacerbates these socio-economic inequalities, preventing marginalized women from benefiting from technological advancements.

The taboos surrounding women’s health intensify these issues. When communities regard topics like menstruation, menopause, or sexual health as taboo, it becomes harder for femtech companies to gain widespread acceptance.

We saw this clearly with Clue, the menstrual tracking app, as it attempted to expand into the Middle East and Asia. Spreading the word organically proved nearly impossible. Even when Clue was available, many women in conservative markets hesitated to download and use the app, fearing judgment from family or society. In these regions, many women avoid digital health solutions related to their bodies due to fears of social stigma or backlash.

Regulatory hurdles, both domestically and globally, further complicate matters. Compared to other sectors, femtech faces greater challenges, including longer approval times. A 2020 study by Rock Health found that femtech companies, particularly those developing medical devices for reproductive health or diagnostics, take 20-30% longer to receive regulatory approval from agencies like the FDA, compared to general health tech products. The lack of research exacerbates this issue.

Only about 30% of clinical trials for new medical devices include women as test subjects, complicating the approval process for femtech products. Companies developing women’s health solutions often need to invest in additional research and trials, increasing costs and prolonging time to market compared to companies targeting broader health issues.

Fierce Foundry is joining the growing number of organisations and initiatives by not only raising awareness about the socio-economic challenges of femtech but also creating a more favorable environment for femtech innovations.

We do this by advocating for policy reforms, raising awareness about women’s health needs, and supporting startups facing regulatory hurdles. In this election year, it’s crucial we prioritize candidates based on their position on femtech. Using non-partisan sites like Vote411, we can research candidates’ stances on healthcare, particularly women’s health issues such as reproductive rights, maternal health, and access to healthcare innovations. femtech thrives in environments where women’s health is prioritized and policies support access to technology-driven solutions. And let’s not forget – for every $1 invested in women’s health we can expect $3 in projected economic growth.

Melissa Wallace is co-founder of the Fierce Foundry, a venture studio with a mission to build female-founded startups from idea to exit.