Women's health presents untapped investment opportunitiesWomen's health presents untapped investment opportunities

Innovation and start-up activity in women’s healthtech is increasing at an astounding rate. These start-ups, more and more which are led by women, are addressing challenges beyond ‘obvious’ female health issues such as menstruation and fertility but incorporating everything from hormonal awareness to menopause.

According to The Economist, women’s healthtech focuses on solutions which aid most of the world’s four billion women at some point in their lives, creating a huge potential market. This is in contrast to healthtech aimed at men which often focuses on conditions which affect just a fraction of the male population. In fact, market predictions show women’s healthtech is forecast to grow to US$60 billion by 2027.

In addressing this vast opportunity, US$14 billion has been invested. To put this in context, this is 3 per cent of total healthtech funding to date. While it seems that the investment community is becoming more aware of the opportunity, this remains a remarkably untapped sector for venture investment where women are leading the way.

Deep-rooted bias in healthtech

There are multiple reasons that prohibit women’s healthtech in securing funding for their growth. One of them is that women’s health challenges have often been associated with taboo themes, such as menstruation, menopausal symptoms, or incontinence. For example, The Guardian reported that less than 3 per cent of publicly funded research was into reproductive health although around 30 per cent of all women will suffer from a related issue.

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Another underlying factor is that female issues have often been overlooked in medical science where for conditions that affect all humans, men are more commonly studied. Traditionally, women’s bodies were seen as too complex due to hormone fluctuations and thus often excluded from clinical trials.

One of the key underlying issues is the existing bias persisting amongst largely male investors who often prefer to fund all-male teams – a trend which Dana Kanze, Professor at London Business School, cited as “homophily”, or the tendency for investors to fund those from similar backgrounds. In the words of ‘European Women in VC’ founder Kinga Stanislawska, investors prefer investing “in founders that are most like them”.

A call for female investors

One part of the solution is a step change in the number of female investors. Women are more likely to invest in businesses that are supplied by, led by, or catered to women as they are more empathetic to issues unique to women and will have an innate understanding of what they want as consumers.

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A Kauffman Foundation study of female entrepreneur funding found that VC firms with female partners were two times as likely to invest in start-ups founded by women, and over three times more likely to invest in start-ups with female CEOs.

To bridge the gender investment gap, The European Commission’s Gender Smart Financing document additionally recommends actively seeking female-led companies as targets for investment and supporting pitching by female entrepreneurs, creating new funds with a gender focus, and encouraging serial female entrepreneurs to become investors/business angels themselves.

Actively seeking such investment is the basis of ‘gender lens investing’ which invests for financial return while also considering the benefits to women. Gender lens investing is spearheaded by VC funds such as Mindshift Capital that has invested in Rosy, a women’s health platform founded by OB/GYN Dr. Lyndsey Harper.  Founded in 2018, Rosy is focused on providing women with access to a range of services and benefits to boost and manage their well-being, including sexual health guidance and a host of expertly created educational resources including videos and self-help materials.

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Joylux is another women’s heathtech company that is addressing menopause by partnering with celebrity Halle Berry to provide products such as the vFit device to help the 60 million peri/post-menopausal women suffering from common intimate health issues.  The company has raised more than US$20 million since inception.

Preterm birth, an acute problem in the Middle East region leading to health issues later in life, is being tackled by NX Prenatal.  The company has developed tests that are designed to provide physicians an ideal opportunity to intervene in a timely manner with protocols for at-risk pregnancies.  The company has raised capital from gender lens investors such as Mindshift Capital, The Jump Fund, and Golden Seeds.

Women’s healthtech is a hot space for venture capital investments. As women make up nearly 50 per cent of the population, there is a large untapped addressable market. With years of underinvestment in providing care to women, there are endless opportunities for investors to support high-growth businesses and generate premium returns.